Budgeting For Beginners

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Budgeting For Beginners

Few things are more frustrating than running out of money. When you are staring at an empty checking account, it can feel like the whole world is against you--especially anyone who you owe money. However, a few years ago I learned a few tricks for budgeting that really made a difference in my life. I have been able to get my spending under control and learn how to save. I have also learned how to prioritize my spending so that I don't have to worry about running out of cash. This website is here for anyone who has ever struggled with money.

3 Ways In Which A Personal Loan Can Improve Your Financial Future

For many Americans, tax season is now over, the refund is long gone and the bills continue to mount up. This is especially true if your family is among the 37 percent of the American population who now have more debt than savings. This precarious trend is growing, leaving many at risk of financial Armageddon, if a major event, such as a job loss or illness should occur. At first glance, the idea of taking on a personal loan to improve your financial future seems crazy, but in some cases, it can be a very smart decision. Here are three common financial problems that may be solved through the judicious use of a personal loan.  

Scenario One: The upside down car loan

Car purchases can seem like a great deal on the day they are made, but as the months and years go by, the payment can get harder and harder to make. This is especially true when the car's value is actually less than the remaining loan amount. This type of negative equity situation is often caused or aggravated when:

  • consumers purchase the car with little or no down payment
  • consumers have little or no trade in value to help reduce the purchase price of the new car they are buying
  • the loan terms on the new car include a high interest rate
  • consumers trade in a car with an outstanding loan balance that is then added to, or rolled into, the new car loan
  • the car depreciates in value faster than the loan can be paid off

Consumers who are dealing with an upside down car loan should consider finding a buyer for the current value of the car, and securing a personal loan for the difference.

When doing this, be sure to talk to your lender before accepting an offer on your car to ensure that you are approved for the loan. This will allow you to confidently negotiate with your buyer and provide them with clear title to your vehicle when you come to an agreement.

Scenario Two: Rebuilding credit after a bankruptcy or foreclosure

Keeping the family budget intact after a bankruptcy or foreclosure situation is difficult. In most cases, you will be unable to obtain a credit card, refinance a car loan or take on many types of new credit because of your damaged credit score. Taking out a small personal loan, even if you must put up something for collateral, can be a great first step in rebuilding your credit.

When considering this, talk with your lender in person and explain that you are working to rebuild your credit and why. Even a small personal loan of a few hundred bucks that is quickly repaid will make a positive entry on your credit report and help to rebuild your credit worthiness.  

Scenario Three: Consolidate Several Small Loans

A personal loan is also an excellent way to consolidate several small loans to help streamline your budget. Loans that are good candidates to be consolidated into this type of personal loan include:

  • credit card debt
  • medical, dental and car repair bills
  • appliance replacement debt

When doing this, the monthly payment amount for the personal loan is often far less than the total of all the small loan payments, making it much easier to budget. Remember, however, to always choose loan terms and interest rates carefully to ensure that you will get the results you desire.

When considering taking out a personal loan, or making any type of financial obligation, remember to use caution and avoid making impulse decisions. Taking on new debt is never a good idea in situations where the loan is taken out to enable bad behavior, such as gambling or some other type of destructive behavior.