Ideally, you will carry as little debt as possible at all times. However, there are situations when taking out a loan is either preferable or the only reasonable option to handle a financial situation. If you are going to take out a loan, what should you consider before you receive the cash and are responsible for paying it back?
Do you have an emergency fund already built? Are you still trying to do so and find it difficult? Either way, it is understandable the discipline it takes to create an emergency fund. If you have done so, all the more power to you. If you haven’t done so, it is not too late, but you must understand the significance and importance of doing so. When you do, this will give you the push to start sooner rather than later. When you run a household or even if you are single, you need to have a financial buffer that will tide you over for up to six months when you have an emergency such as losing a job or a medical illness. The six months worth of finances will help to pay for your living expenses while you get well or try to look for a new job.
Parents expecting their first child do anticipate mistakes because this is their first experience. If you were a babysitter in high school for the neighbor’s kids, you may know a little bit about babies and how to raise them or how to soothe the baby’s crying. It will be the same situation for the financial element attached to parenting. As a new parent, there are several ways that you can waste your money. Having the right information will save you tons of trouble and frustration. For this reason, it is best that you become aware of the money traps that new parents may fall into. To be a parent, it is expensive – from the diapers to the constant feeding, mothers and father can rack up a huge bill every year until the child gets to the age of 18. If you are thinking about adding a new child to the family, there are some mistakes that, if you avoid, can save you thousands of dollars.
When banks offer interest rates that are close to zero percent, then it is not a surprise that consumers don’t want to bank their emergency funds there! For people who are financially savvy, the objective is to get a better return on their hard earned money. Therefore, these people will opt for mutual funds and stock instead of putting money in savings accounts with low interest returns. When you have liquid cash, though, you need somewhere to put those funds for a rainy day.
Federal student loans cannot be refinanced in the same way as other consumer debts can. It is best, if you can, to pay your federally acquired student loans in full. If not, it could lead to serious consequences such as wage garnishment or your tax refund being taken away from you. Presidential candidate, Hilary Clinton and democratic Senator Elizabeth Warren have proposed the refinancing of federal student loan debt for borrowers. This was proposed so that borrowers can enjoy reduced interest rates.