9 Steps to Getting the Car You Want
Unless you are going to start collecting 400-foot mega yachts, a vehicle is likely to be one of the largest purchases you will make in your life. By taking the time to properly plan and prepare for buying a car, you can save yourself hundreds or thousands of dollars. Check out these steps to set yourself up for a more secure financial future:
1. Figure out what you can afford.
Complete a spending plan. As you create your spending plan you can adjust the numbers to see how different transportation expenses would fit into your monthly expenses. You can then plug that monthly number into an auto payment calculator to see how much of a total vehicle price you can afford.
2. Monitor your credit.
Review your credit reports. To ensure the accuracy of the reports and pinpoint areas that may need work, use the credit bureaus’ annual credit report service to get free copies of your reports at www.annualcreditreport.com or by calling 877-322-8228. If you would like a certified credit coach to review your reports with you, call BALANCE at 888-456-2227.
3. Find the right car for you.
Think about how you will use the vehicle. Will you be using it to cross snow-covered mountain passes with hairpin turns and thousand foot drops, or will you be using your vehicle for something more challenging, like chauffeuring your children?
Pay special attention to the safety and reliability ratings. No car meets your needs when it’s up on blocks next to the garage or puts you at personal risk of harm.
Check with your insurance provider. That cherry-red sports car might sound like the key to your eternal happiness, but you might not be as thrilled when you get your car insurance bill.
4. Consider new vs. used, buying vs. leasing and down payment amount.
Decide whether you will buy a new or used vehicle. Do you prefer the negligible wear-and-tear and increased reliability of a new vehicle, even if it means the value may drop sharply in the first few years? Or would you rather let someone else take on that depreciation by going with a used vehicle, but take the risk of not fully knowing the condition and history of the vehicle?
Figure out if you would rather buy or lease the vehicle. If the idea of always driving a new car matters more to you than likely saving money in the long-run, leasing might be an option to consider.
Think about how large of a down payment you can make. Making a down payment can help you get qualified for a loan, get a better interest rate, get a lower monthly payment, get a more expensive car for the same monthly payment, or build equity (owing less on the vehicle than it is worth) more quickly.
5. Get financing.
Get pre-approved before you go to the dealership. You will have a lot to think about when you are at the dealership looking at cars: different vehicles available, test-driving, negotiating a price, etc. Just like you shop around for a good deal on a car, shop around for the best deal on financing.
6. Determine favorites, contact dealers and check quality.
Find the vehicles that best fit your needs. Websites like cars.com, CNBC, Consumer Reports, Edmunds, Kelley Blue Book and Yahoo Autos regularly publish articles on the best vehicles to meet particular needs, so take advantage of these free resources. Create a comparison chart to keep track of all the attributes that matter most to you and how each vehicle stacks up.
Use the Internet or trips to dealerships to comparison shop. Once you know which vehicle will suit you best, start looking at particular models and add the prices of each to your comparison chart. Also, do test drives and check vehicle histories. During the test drive, pay special attention to the transmission, shocks, brakes and alignment. If you aren’t sure what to look or listen for, invite a more experienced driver along on the test drive. Write down the Vehicle Identification Number (VIN) and use it to get a vehicle history report from a company like AutoCheck or CARFAX if you are shopping for a used vehicle.
7. Get the best price on the car.
Negotiate each piece of the deal separately. Beware of salespeople who roll the different components of the transaction (purchase price, financing, trade-in, extras) into one deal or who make an offer in one area of the deal that sounds too good to be true. Take advantage of our Auto Advisors and they will do the negotiation for you.
Walk away if you are not happy with the deal. You know what you can afford and ultimately you control this transaction, so let the salesperson know you know where the door is and that you won’t hesitate to use it if they can’t meet your number.
8 Know your legal responsibilities.
Find out the insurance necessary for your state. The Insurance Information Institute’s website at www.iii.org has a list of the minimum insurance requirement for each state.
Learn what the DMV requirements are for your area. Contact your state’s Department of Motor Vehicles (DMV) to make sure you have the proper license plate stickers or any other items that might be necessary to register your vehicle.
Know what to do if you can’t make your car payment. If you find yourself in a situation where you are struggling to make a car payment, the worst possible thing you can do is to avoid your lender. Instead, work to avoid repossession by staying in contact and asking about hardship programs.
9 Put yourself in position to succeed long-term.
Establish an emergency savings account. Unexpected expenses have a way of popping up in life and vehicles can be a major source of these.
Save on gas. Consider ways you can get more out of the gas you buy, like using the air conditioning sparingly and removing heavy items from the trunk.
Save on your insurance. Shopping for the best insurance deal is always a good idea, but think about all the ways you could get a better deal, like improving your credit score, buying a used car instead of a new one and avoiding 4-wheel drive and high performance cars.
How Can Decluttering Save You Money?
What is the current state of your closet? Is it stuffed to the brim with clothes, shoes, suitcases, cleaning supplies, your high school yearbook textbook, etc., or can you do cartwheels in there? Is every horizontal surface covered in piles and piles of stuff or is almost like a guest room?
A clutter-filled house can lead to increased entertainment costs; you don’t want your friends to see the mess (or are sick of seeing it yourself), so you go out. Duplication is another way that clutter can cost you. Have you ever spent money on something you already had because you had no idea where it was, and did not want to spend hours looking for it?
If the thought of actually having to go through all your stuff makes you sweat, don’t worry. Here are some tips that can help make the decluttering process as painless as possible:
Do a little at a time: You are less likely to get discouraged and give up if you set a series of small goals spread out over time instead of trying to clean up the whole house at once.
Take a picture of sentimental items: Do you have some items that you never use but can’t throw out because of their sentimental value (such as the doll you bought for your daughter who is now 25)? Taking a picture can make it easier to part with. You will have a reminder even if it’s no longer collecting dust in your closet.
Donate or sell: While some of your items may be worn out and only welcomed by the trash bin, there may be many things you can sell to a consignment or thrift store, or donate to charity. Think of your cleaning as putting money in your pocket or helping others, instead of just a chore.
Use the “one in, one out” rule: After you go through all that effort to get rid of what you don’t need, you probably don’t want the house to revert back to its former messy state a few months from now. A good solution is to get rid of something whenever you purchase something new. You buy a new t-shirt at the mall—when you get home, go into the drawers and get rid of an old one.
By taking the time to declutter, you’ll be cleaning all the way to the bank.
4 Ways to Avoid Over Spending During the Weekend
If you are smart with your money, chances are you don’t spend much during the week. However, it all gets turned upside down when the weekend comes. You may feel the urgent need to go out, buy new outfits, and have a few drinks with friends, which leads you to spend all you saved up during the week. This is not terrible unless it becomes a habit. Lucky for you, we have some tips that will allow you to have fun during the weekends without overspending.
- Make good use of free recreation.
Living in Florida gives you the advantage of having beautiful outside areas where you can have fun, build memories, and relax. Take the beach for example- if you’re smart all you have to pay for is parking. Bring a cooler with some waters from home, food, and a beach ball and enjoy. If you want some drinks, buy them ahead and add them to the cooler. You will be saving a lot more money buying drinks ahead, than buying them at local hangout spots.
If you aren’t a beach person, you can try the same concept at a pool, or even a park. The outdoors can be really fun and not terribly expensive. Take advantage!
- Don’t go shopping out of emotion
We know you probably own a million outfits, so that millionth and one is probably not necessary. Get creative! Change accessories, do something different to your hair, make it work. Unless you absolutely need it, try to avoid it. If you do give in, look for sales and make sure it is something you will wear more than once.
- Take your credit cards out of your wallet.
Yes, budget yourself ahead of time by planning out your weekend. The rule of thumb is to spend the money you have in the bank only. Not the imaginary money you can have by buying extra with your cards. That is a big NO.
- Have a get together at home
If going out to watch the game is where your money goes, try to invite your friends over and watch the game at home. Everyone can contribute food and drinks and you can have just as much fun.
Remember, you can have fun without breaking the bank. Use your member discount if you can. Have fun, just do it in a smart way.
4 Ways to Manage Medical Debt
Unfortunately, when you get sick or injured, getting better is often not the only concern. Even if you have health insurance, hefty medical bills can hang over your head like an ominous raincloud. Many people feel that they have no choice but to ignore the bills or eventually file for bankruptcy. However, these are not the only options. There are many ways you can make paying your medical bills more manageable.
1. Check the bills
Often people are so shocked over how much they owe when they first open their bills that they forget to look at them in detail. However, since medical bills are frequently inflated, looking over them carefully could save you money. Maybe you were billed for a four-day stay in the hospital when you only stayed two or charged twice for the same medication. If you see that you were billed in error, contact the medical provider to have the charge removed.
If you have health insurance, it is also a good idea to make sure your insurance company paid for everything covered in your plan. If an insurance company denies a claim, the medical provider will just bill you, even if the treatment is covered under your plan. How easy is it to get an insurance company to pay a denied claim? If it was merely a clerical error, it should be simple. If you are dealing with a stereotypical penny-pinching insurance company trying to wiggle out of a commitment, it could be harder—but not impossible. Most insurance companies allow you to appeal decisions, and if you submit evidence to support why the treatment should be covered, like a letter from your doctor, you may be able to have the denial overturned.
2. Ask for a repayment plan
Even after billing errors are corrected, the amount you owe may still seem frighteningly large. However, there is no need to panic if you cannot pay a bill in full. Most medical providers will allow you to make smaller payments until the bill is paid off and, in many cases, won’t even charge interest. Think about how much you can afford to send each month, and let the medical provider know.
If the medical provider does not accept your proposal, should you not send any money? Not necessarily. Few people will actually refuse money, regardless of how small the amount is. That does not mean you are immune from being sued or having the account be sold to a collection agency, but all you can do is send what you can afford to pay. Not paying your mortgage or other important expenses to get more cash for your medical bills is usually not a good idea.
3. Look for assistance
If you have medical bills from a hospital, you are probably well aware of how high hospital bills can be. Luckily, many hospitals get government funds and donations to cover the bills for patients who cannot pay them themselves. (Other types of medical providers typically do not get such funds but may give you a discount if you describe your hardship.) Talk to your hospital’s billing department or financial counselor about its programs. Remember to find out what the application procedure and qualifications are; often assistance programs are restricted to people who owe above a certain amount, have income below a certain limit, and/or have no medical insurance. Even if you ultimately do not qualify, it does not hurt to ask.
Hospitals are not the only places where you can get financial assistance with your medical debt. Many nonprofits provide the same service. Like with hospitals, nonprofit programs are often restricted to limited income and/or uninsured individuals. To find out what programs are available in your area, contact your local United Way or dial 211 (an information referral service available in most communities). You may also be able to get information from relevant disease support groups.
4. Create a plan for the future
While your current concern may be the bills you need to pay now, chances are, you will have more medical bills to pay in the future. Getting sick is just a part of life. However, if you start saving today, it will be easier to pay whatever bills come your way tomorrow. While you can put your savings in a savings account, you may also want to make use of one of the tax-advantaged accounts available for medical expenses.
If your employer offers it, one option is to set up a flexible spending account. At the beginning of the enrollment period (which if often, but not always, January 1), you tell you employer how much you want withheld from each paycheck and sent to your account. You typically must pay for the costs out of pocket first and then get reimbursed after submitting a claim form. While the money sent to a flexible spending account is not taxed, there is one drawback: you lose any money that is not spent by the end of the year. Thus, you should not contribute more to a flexible spending account than you reasonably expect to spend.
Another option is a health savings account. Like with a flexible spending account, the money contributed to a health savings account is not taxed. However, you do not lose the money that is left over in the account at the end of the year. So, why would anyone choose a flexible spending account over a health savings account? Health savings accounts are not available to everyone. In order to qualify, you must be enrolled in a high-deductible health plan (a plan with higher deductibles and lower premiums than traditional plans). If you have a traditional plan, you are out of luck.
Medical bills can linger long after an injury or illness has been treated. While the amounts owed can seem unbelievably large, remember, there are many things you can do ease the pain of bill paying.
5 Ways to Cut Your Monthly Expenses
Ever notice how your monthly expenses always seem to equal whatever salary you’re making, even after you get raises? The phenomenon is called “lifestyle creep” and it can keep you from reaching all kinds of financial goals, from paying down debt, to saving for retirement. One way to get lifestyle creep under control is to have any future raises you get direct deposited into savings – like a 401(k) account through your employer, or an Individual Retirement Account (IRA). But here are five things you can do right now to cut your monthly expenses.
- Make a Budget
The first step toward cutting expenses is to make a budget, so you know exactly where your money is going. Start with major categories, like rent or mortgage, utilities, transportation, meals, clothing, and entertainment. Then break it down even further to ferret out items that are ripe for reducing. Many people, for example, are surprised to learn just how much they pay for pricey lattes and snacks from restaurants and vendors that would cost a fraction of that amount if they were made at home or purchased at a grocery store. - Lower Your Mortgage Payment
The biggest monthly expense for many people is their home mortgage. If you haven’t examined that loan since you bought your home years ago, it’s quite possible that you could save a lot of money – both now and over the life the loan – if you refinance at a lower interest rate. To know whether refinancing makes sense, you’ll need to add what you’ll spend on closing costs into the calculation of your new monthly payment. - Get an Insurance Checkup
If you have a car, you absolutely must have car insurance. But it pays to shop around periodically to make sure you’re getting the best deal. If you have a decent emergency fund on hand in case of an accident, one way to lower your premiums is to increase your deductible. Also be sure to examine your policy for “extras” you may not need. For example, you could be paying for roadside assistance both through your insurance policy and through AAA. - Examine Your Auto-Payments
Putting your regular bills on auto-payment can be a really smart way to protect your credit rating by ensuring you’re never late with a payment. However, if auto-pay causes you to keep paying for items or services you don’t really need or use, it’s no bargain. A few common culprits include unused gym memberships, subscriptions to magazines that aren’t read, and cable or satellite TV plans that include loads of premium channels that are rarely watched. - Cut the Cord
If you’ve already ditched your land line, good for you! If not, doing so is one of the quickest and most pain-free ways to trim your expenses. Most all of us have our cell phones with us all the time anyway, and if you really like the feel of a traditional phone in your hand, a VOIP (Voice Over Internet Protocol) plan that provides phone service over the Internet is a lot cheaper than traditional land line service.
6 Confusing Things About Your Credit Report
If you’re not used to reading them, credit reports can make about as much sense as a restaurant menu printed in a foreign language. At least in a restaurant, you can point to what someone else is having. But if you don’t know how to read your credit file, you could make mistakes that could lead to your financial life being harder than it needs to be.
Here are some common misinterpretations people make about their credit reports and how to avoid them.
- They have too many student loans listed for me
When student loans are listed on credit reports, they are often broken up into individual loans for each semester you took out a loan. Of course, you still want to make sure all the loans are yours, but don’t be surprised if you see a lot of loans listed under the same provider. - I must be a victim of ID theft because someone else’s name is on my report
When companies like Equifax, Experian and TransUnion compile your information, they look to gather up all financial information that is being reported for you. In doing so, they may accidentally confuse you with someone with a similar name or other bit of identifying information. This can result in that person’s name, address, date of birth, Social Security number, etc. being mistakenly listed on your credit report. You can always have this kind of information removed from your credit report by disputing the information at the website of the bureau that is listing the information. You can access the website for the individual bureaus listed above by simply adding “.com” onto the name of the credit reporting agency. - I paid that collection account, it shouldn’t be on my report anymore
Collection agencies aren’t required to remove a collections account from your credit reports once you have paid it. All they are required to do is list that the account has been satisfied. Negative accounts like these stay on your credit report for seven years from when the account first went delinquent with the original creditor, whether they are paid or not. - My credit score is missing
The credit reports we are all entitled to by federal law – available at www.annualcreditreport.com or by calling 877.322.8228 – do not come with a credit score. There is currently no law that automatically provides everyone with a free score. FICO is the company that provides the score most commonly used by lenders. You can purchase a score from them at www.myfico.com. - My date of birth and address are part of lending decisions
When you access your credit reports, you will see that some of your personal information is listed in addition to your financial data. For example, the report may list where you live, when you were born, and who you have worked for recently, among other things. You needn’t be worried that this is being used against you when a potential lender is looking at your reports, though. It is illegal for a lender to use age or address when making lending decisions and these pieces of information are not calculated into your FICO credit score. - All these inquiries count against my score
When someone other than you looks at your credit report, it results in what is called an “inquiry” being put on your credit report. If you’ve ever looked at credit reports, you may know that there can be a whole lot of them listed at any one time. Keep in mind that the only inquiries that are ever factored into your credit score are ones that happened in the past year (even though they stay on your credit report for 2 years) and the ones that were for the purpose of you applying for credit or financing some other type of financial contract. The other types of inquiries are not counted against you.
Read This Before you Break Your Lease!
Many tenants find themselves in a situation where they need to or want to move out before the end of the lease term. If you are breaking your lease, it is important to keep in mind that a lease is a legally-binding document, and if the remaining months’ rent is not paid, the landlord can sue you and obtain a judgment (which may allow them to garnish your wages or take other collection actions against you). Losing your job, taking a new job in another location, not liking the place, or buying a house does not allow you to be released you from your lease. However, there are a few exceptional circumstances in which you may be able to have your lease invalidated, including:
- The landlord lied about a fact that he or she knew played an important part in your decision to rent the unit, and the fact could not be easily verified by you in advance.
- The landlord failed to keep the unit in safe and habitable condition.
- You are a victim of domestic violence or stalking.
- You or your spouse is in the military and received orders to move or deploy.
Rental laws vary by state, so it is a good idea to do research or speak to a lawyer or tenant organization about whether your situation allows you to invalidate the lease before you move out.
While breaking your lease does not release you from the responsibility to pay rent, you may not actually have to pay it all. You should talk with your landlord as soon as you know you will be moving out. In most states, the landlord is obligated to look for a new renter for the unit. You can also look for a new tenant yourself. Generally, the landlord cannot refuse to rent the unit to a qualified applicant and still hold you responsible for the rent. Once a new renter is found and starts paying rent, you are off the hook—with a caveat. If the landlord can only rent the unit for less than what you were paying, you can be held responsible for the difference in rent until the lease expires. For example, if you were paying $1,100 a month and broke the lease with 6 months left, and the landlord could only rent the unit for $1,000 a month, the landlord is entitled to $600 from you.
Some landlords also allow tenants to be let out of the lease by paying a fee. Landlords are generally only allowed to be compensated for what their actual loss is, so they cannot demand that you pay an arbitrarily-determined fee. However, if your apartment is located in a soft rental market and it is unlikely that a new tenant will be found soon, it may be to your advantage to pay the fee if it is offered. You may want consult with a lawyer or tenant organization before signing a lease-breaking agreement and paying the fee.
If you choose to break your lease, you will likely have some financial loss. However, careful planning on your part can help you keep the loss to a minimum.