Basic Financial Planning Tip
One of the best (and most simple) financial planning rules has helped a lot of people through the current economic problem relatively unscathed. Oh sure, they more than likely lost some value in their assets but they didn’t lose everything like some people did. This basic tip requires a mind shift for a lot of people but as we have seen the last few years not following this rule has been the downfall of many families. This is called the 10% rule. You should ALWAYS take 10% of any money you make and save or invest it. Just make the assumption that you actually make 90% of your actual wages and live on that amount while building up a nest egg with the other portion.
This used to be common practice particularly by the generations who lived through the depression. They would save money until they had enough to buy what ever they wanted instead of going out and using high priced credit to buy this or that toy of the week. This particularly became apparent with car credit. It is now common practice for people to buy cars on time instead of saving up to purchase transportation. In fact, we have seen a large increase in no money down financing as the auto industry tries to move units any way they can. The fact is, if a person can’t come up with a down payment for a car, they probably will have a hard time making the payments and they will end up in bad financial straights. This is particularly true when buying a new care with no money down. As soon as you drive the car off the lot you are upside down in the loan. That means you will owe more than the car can be resold for because it is now a used car. If you did have to sell it you are stuck because you will need to come up with the balance of the loan.
If instead of falling for these no money down tricks you instead made the commitment to save 10% of your money each month until you had a good down payment you could alleviate this problem of being under water or upside down.
The fact of the matter is, we have been living beyond our means by borrowing money to support a life style which is not supportable. Millions of people got caught with this problem in the last few years because they borrowed more than they could ever hope to pay back and now we see people all the time trying to buy a car with bad credit because they need transportation and their over priced SUV was repoed. The only way to fight this problem is to get back to the notion of saving a certain amount each pay period and waiting for the new toy till you can pay cash or at least have a big down payment. A side benefit may be that you decide you don’t need that toy after all.
Similar Posts:
- How To Save Money On Expensive Loans
- Tips for Getting a Mortgage with Bad Credit
- 3 Reasons Debt Negotiation Is a bad Idea
- Should you pay a fee for a tenant loan?
- Tracker Mortgages – The Basics
- Advantages Of Credit Cards
- What Affects Second Mortgage Rates?
- You May Want to Think About Payday Loan Yes
Payday loans are an extremely expensive way to get cash fast. Fortunately, there are a few things that you can do that will help you save money on them, and bring their extraordinary price down to Earth a bit. It’s not…Read More
Bad credit makes it tougher to get a mortgage, but it is not impossible these days. There are many programs out there that can help you, but as a rule the lower your credit score the tougher it is to get a home mortgage …Read More
Have you been considering debt negotiation? If so you may want to read this article to learn about why debt negotiation is a bad idea. Damages Your Credit Score Going through debt negotiation is kind of like going throu…Read More
If you are looking for the proper tenant loan that will fit your personal needs then you will have to compare your different options. A great way in doing that is by asking for several quotes from different loan companie…Read More
A tracker mortgage is a popular mortgage type typically found in the United Kingdom. The rates of are always based on the current rate of the Bank of England and while these loans are extremely popular for there up front…Read More
Credit cards, if used properly and responsibly, can be helpful in today’s world. Just as there are disadvantages, there are advantages that can help you in your day to day life. First and foremost, not having the cash on…Read More
Many factors have the possibility of influencing second mortgage interest rates. When thinking about getting a second mortgage, it’s important to find the lowest rate possible, so that makes it worth while to understand …Read More
If you have found yourself in a situation where you need money and you need it really fast then Payday Loan Yes may be the company for you. They offer quick loans to almost 100% of the people that apply for their loans. …Read More
Popularity: 12% [?]