On Surviving A Personal Financial Crisis - And Other Personal Finance Subjects Like Loans, Credit, Debt, Debt Management, And Saving Money

It is really interesting that very few people think about refinancing their auto loan to reduce their expenses. I do not know about you, but I always feel like I am getting taken for a ride when I buy a new car. I usually do a pretty good job negotiating what I will pay for the car. However, I almost never think about negotiation the interest for the loan. If you are paying an interest rate above 7 or 8 percent you may want to consider refinancing your car loan. If you do not have good credit you can still refinance, bad credit auto refinance is not as had to qualify for as you might think.

Qualifying for a loan refinance is much easier than qualifying for a new loan. Basically, it is easier because you have a proven track record paying the loan. A few things to keep in mind. Refinancing anything especially a car loan should not be taken lightly. You should refinance for the right reasons. It is a tool that if used properly can help you loosen up a little cash flow.

Do your homework first before agreeing to a refinance loan. Shop multiple lenders for the best rate. The easiest way to find lenders is to look for them online. Do not be bullied by your lenders. Remember you are doing this to help your finances. If the loan does not meet your qualifications then refuse it. Make sure that there is not prepayment penalty. In my opinion prepayment penalties are just a way to rip you off.

Although, these loans are easier to qualify for, there are still a few things you should keep in mind. First, most lenders will not refinance their own loans. Obviously, the car has to be in decent condition, no private leans. Also you have to have had the current loan for at least 3 months before most lenders will approve a refinance loan.

To qualify, you will have to be up to date on all your other bills and debt payments. If you have bad credit with a bankruptcy or repossession most lenders will not lend you money for 12 months after their disposition. Besides, having heavy hits on your credit like these will push you into the subprime category, forcing you to get a bad credit auto refinance loan. There are much heavier interest rates associated with this type of loan. The higher the interest rate the less valuable car loan refinancing will be to you.

Although the economy is coming out of recession, the actually economic recovery is going to take years. This is especially true for consumers that have had their financial lives decimated by layoffs, out of control interest increases and other fall outs from the credit crunch and real estate market meltdown. One repercussion from the recession that will likely be with us for possible decades to come is the number of consumers that are saddled with bad credit ratings.

Millions of people in the United States and other countries have had home foreclosures, car repossessions and have been late by 30, 60 and 90 days on other debt payments all due to little fault of their own (e.g. they lost their job). Most of those people are going to have to have to figure out how to refinance with bad credit. Bad credit refinance may be a reality that many of us will not be able to avoid.

If you have not already, then you should start thinking about how you are going to repair those dings, and for some of us gashes, on your credit report. The first thing you will want to consider is how to stabilize your finances. You may have a lot of different types of debt at different points of repayment. If you credit score has not fallen too far you may want to consider refinancing despite your lowered credit rating.

Refinancing or consolidating your loans may be the best thing for you to do. You will want to be very careful about the loan type you choose. Make sure the reasons that you are getting the loan are strategic financial reasons. If you refinance with bad credit it will most likely still be cheaper than paying off the high interest rates associated with your credit cards. Especially, if you are already receiving late payment penalties because you cannot make the minimum payment on time, then you will want to consider this type of refinancing. Don’t let the term bad credit refinance scare you. Yes, you will pay more than if your credit was pristine. But, how many of us really have pristine credit?

The simple fact of the matter is that very few people are going to come through the recession unscathed. Now that the economy is recovering, you need to think about your own recovery. What are the steps you need to put your finances back on track? What tools are available? Have you taken some hits on your credit? If you have, how much damage have you sustained? If you have bad credit you may need to do a loan refinance with bad credit. If you decide to go this route, you need to weigh the pros and cons. Will you be paying less per month? Using this type of loan needs to be right for you.

Reducing your monthly mortgage payments can be a great way of wringing a little extra income out of your budget. If you are barely keeping your head above the financial waters, then that few extra hundred dollars a month could be just enough to get you going. If you are doing pretty well in these tough financial times you could use the extra income to pay off other high interest rate debt. Or you could use the extra money to start that emergency fund you have been thinking about. In any case you may want to consider a 40 year mortgage.

A forty year mortgage is simply a 30 year mortgage whose amortization has been extended for ten more years. You will pay a little more in interest, about .25% to .50% interest than a regular mortgage. But, the extra cash flow you may realize could be exactly what you need to get you through tough financial times. The biggest drawback to using a 40 year mortgage is that the extended loan period will increase the total cost of the loan.

How much the cost will increase will depend on your specific financial circumstances. Depending on the length of time you keep the loan the total cost net cost could be in the tens of thousands of dollars. However, you do not have to keep a 40 year mortgage for its complete term. You can always refinance the 40 year loan using a more traditional 30 year mortgage.

The biggest advantage a loan like this provides is flexibility. Having a longer loan term means lower monthly payments. This means you have extra money to pay down other debt. Once the other debt is paid down you can then use that extra cash realized to pay down the principal of the 40 year mortgage or other debt. Either way you start to increase cash flow, reduce your debt and as a result your personal finances will become healthier.

If you decide to use this type of loan then, you should consider it a tool to accomplish a goal. Once you have accomplished your goal you should refinance. You do not want your gains to be eroded by the long term cost of holding a 40 year loan. As long as you are aware of the long term costs of a 40 year mortgage it can be a great tool to help you out of a financial tail spin.

On this site I have written a lot about how to save money by controlling your bills, understanding where you are spending your money, controlling costs, and how to think about preparing for a financial crisis. One thing that has only been touched on briefly is the importance of creating extra income. Although the economy is beginning to recover from the recession it will be a while before the job market recovers. How can you go about increasing your income until you can get a new job or until you are returned to full employment? What are some money making ideas that will help you earn a little extra income? How can you go about creating your own money making ideas that are simple and easy to implement?

Simple Money Making Ideas Are Found Around The Home

There are the usual money making ideas; like, mowing lawns, picking up odd jobs. There are a lot of online articles that tell you the same things over and over. Instead of repeating the same information that is in a million different places, I want to talk about a process by which you can come up with your own ideas on how to make a little extra income. It is all good and well to get ideas on how to make money from many different places. But, I think you will find that most of the ideas you will find will be generic in nature. Moreover, very few of them will truly fit your needs. Only you know what you are capable of and only you know they type of resources you have available to put into a new money making venture.

A Process For Generating Money making ideas.

On a sheet of paper write down all the skills you have. No matter how mundane you think that skill is write it down. I would suggest grabbing your resume and using it to help you create the list. Go through each job you have had and write down what skills you used at each.

You know have a set of sellable skills. You know need to figure out how and where to market those skills. If the skills you have produce work product that is easily transported digitally you can fully leverage the internet to cast a very big net to look for freelance jobs. If your skills are more labor intensive you can still cast a broad net just not as easily.

Formula For Developing Money Making Ideas

Skills plus marketing equal money making ideas. Once you have created your list of ideas choose the entries that can be described as simple money making ideas. The simpler something is for YOU to do the sooner you will see a return on your invested time. This is a simple process to help you develop money making ideas that are easy for you to accomplish. You may not grow rich with the ideas that you produce off your list but you should be able to create enough income to start reducing the financial burden you are currently feeling.

Beware Of Get Rich Schemes Selling money Making Ideas

A word of warning. In tough economic times like these there are plenty of people out there selling get rich quick schemes. Or, they are selling you a strategy that you do not have the correct skill set to bring to fruition. Don’t go blow big bucks on a scheme that promises to be the easiest way to make money or the fastest way to make money. Instead take the idea, do the research yourself. Figure out the process and the skills needed to accomplish it. Match the skill list to your skill list and figure out what you need to learn and learn it on your own. There is plenty of information out there. You can figure it out without spending tons of money unnecessarily.

Remember the fastest way to make money is by using the skill sets that you already have. Money making ideas that do not fit those skills should be put aside to be revisited later when you have the time to develop the skills. In the end money making ideas are just ideas. Do not get too attached to one or another. If the one you choose does not work, move on to another. That is way you are using simple money making ideas, so you do not have too much invested in one idea over another.

Preparing for a recession, and surviving a recession for that matter, is all about doing more with less. During good economic times we tend to not look at our personal finances as closely as maybe we should. During good economic times we tend to over look the little increases in our fixed expenses. But, during bad economic times like recessions we also tend to look over some pretty obvious candidates for cost cutting. Or for that matter, we tend to over look places where we can save money. The following are 10 recession tips that I may help you to come up with some other ideas for saving money with banking and other personal finances.

Recession Tips For Saving Money Banking

Recession Tip 1: Deposit your money you want to save in a savings account at a bank that offers higher than normal interest rates. Most of the time banks that offer the highest interest rates, are banks that are based primarily on the internet. Because they are primarily located on the internet they they don’t have brick and mortar offices and so they have lower expenses. Many people have shied away from internet banks. People are just used to being able to walk into a bank office. It makes them feel a bit more secure. Times are changing and more and more people are getting used to the idea of having both their savings and checking accounts with Internet banks. These banks are really no different than any other bank. As long as the internet bank you choose for your savings account is insured by the Federal Deposit Insurance Corporation (FDIC) then you money is safe. That is your savings and checking accounts are safe up to $250,000.

Recession Tip 2: Some banks make huge profits on the fees they charge. The banking business is getting more and more competitive. If your bank charges you fees dispute them or ask them to refund your money. You should not have to pay fees to whether on your savings account or on your checking account. There is simply too much competition out there for your banking business for you to ever pay fees.

Recession Tip 3: Almost all banks have online bill pay. If your bank doesn’t then it may be a good time to think about transferring your savings account and your checking account to a bank that does. Online bill pay is great for a few reasons. First with online bill pay you can schedule your payments. If you are like me and wait to the very last minute to write the check and mail it, having scheduled online bill pay could save you a lot of money in late fees. Online bill bay, especially if you schedule the payments, can save you a ton of time. Time is money. So the more time you save the more money you save.

Recession Tip 4: Save money by tracking your expenses. Once you know exactly where you spend your money it won’t be difficult to where you can cut your expenses to save money. Most banks today allow internet access to track the activity on both your savings and checking accounts. Take advantage of this fantastic accounting function. Use the debit card that your bank gives you to track every single purchase that you make. At the end of the month down load a transaction file and upload it to a personal accounting software like Quicken. ( Note: I highly recommend using Quicken. They are the market leader, and have been for a long time, in personal accounting software. I don’t know of any bank that does not allow you to down load your debit card transactions in a format that is ready for Quicken. Besides Quicken’s strong bank affiliatations it produces fantastic reposrts that will help you create a realistic budget. It also has functions that allow you to create estimates by increasing or reducing expenses or increasing your income).

Recession Tip 5: Save money by tracking your expenses by using a credit card. There are some credit card companies that are now allowing you to download detailed transaction reports in a format ready for most personal accounting software, like Quicken. Recently, the credit card company pushing this capability the most has been Discover. The only drawback to doing this is that you need to be disciplined enough to pay off your credit cards every month so that you don’t get stuck paying interest. And that brings me to Recession Tip 6.

Recession Tip 6: If you carry a monthly balance on your credit cards, I highly recommend that you don’t, you can save money by requesting a reduction in the interest rate you are being charged. For whatever reason some people are so scared of the credit card company that they don’t want to do this. Here is the reality, If you pay on time and are never late there is no reason you should be scared of asking your credit card company to lower your rate. If they refuse to lower your interest rate just stop using that card. On average Americans have four credit cards at any one time. Just use the credit card that agrees to lower your interest rate.

Recession Tip 7: Many people pay their credit cards late. You can save an average of $39.00 per credit card per month just by paying your credit card bill on time. For the average person that means you can save a lot of money every month just by paying your credit cards on time; about $156.oo per month. If you leverage Recession Tip 3 and you schedule a payment through your banks online bill pay service then you will never be late. Besides, a lot of people believe that credit card companies mark payments late when they really were not. Online bank payments are done via wire transfer. Once the credit card company receives the wire transfer there is no denying that it was paid on time.

Recession Tip 8: you can save money by being and staying organized. My life is hectic. And, if you are like me the bills are almost always the last thing on my mind. So I have designated one day a week to pay bills. I also have one place where all the bills are put as soon as they come in. If they are bills that are scheduled to be paid through online bill pay then I verify the balance at my banks website then file the bill as paid. If the bill is an irregular bill I either setup a payment through online bill pay or if I have the money I pay it right away. Because I go through this process once a week there are only about four or five bills that need to be done so it only takes about twenty minutes. Stay organized and you will save money on late fees and charges. Moreover, your life will be a lot less stressful. A lot less stressful because you won’t have that nagging thought in the back of your head that the “BILLS HAVE TO BE PAID.”

Recession Tip 9: You can save money by never using a debit card or credit card at an ATM to get cash. ATMs are probably one of the most evil inventions ever made. If you are in the habit of withdrawing money from an ATM get out of it. Not only do you waste a lot of money on ATM fees but it is hard to track exactly what you spent that money on.

Recession Tip 10: You can save money by paying yourself first. Yup, that’s right you can save money by paying yourself. You give yourself a weekly allowance to use for whatever you want. But once that money is gone, you don’t get any other money. I know this conflicts with Recession Tip 4 and Recession Tip 5 but the funds are tracked but as an allowance to you. Paying yourself an allowance to save money will at first be really hard to do. But, once you get used to it, you begin to be really frugal with how you spend your allowance. I know, this suggestion kind of eats into the ego a little bit; Back on an allowance. But, you will surprised how much money you can save by limiting your discretionary spending to a fixed amount.

Although a few of these recession tips are pretty obvious ways to save money. But, I hope there were a few tips for saving money that were new to you. Although, I did not mention it here, I really think that one of the most important tools you can use for saving money is to create a budget. Once you are able to track where you spend your money and understand where you can save money you can put together a realistic budget. You need a budget that you can follow. You can have the most well thought out recession survival plan but if you do not follow your budget you are sunk. It does not matter how well you prepare for a recession, if you can’t adhere to your budget then you are going to have problems surviving the recession if it comes knocking at your door. Use these recession tips to help you make intelligent decision about finding unique ways to save money.