Life insurance is NOT…

You probably became desensitized when you hear the mightiness of having insurance. You ought to hear the constant mantra of insurers that “in life, it’s better to be prepared.” While it’s an undeniable fact, insurers will repeat this magical mantra, again and again, tweaking the wording here and there to appropriate it in a situation.

 

Most of them do this not because they genuinely care, but they are paid to care. They will say a lot of things which you can’t help but to agree since most of what they say is too apparent. They will do and say anything so that they can convince you to buy insurance from them.

 

If an insurer becomes a ‘superhero,’ he should be called, Captain Obvious.

 

This article is written to let you know what life insurance is NOT:

 

 

Life insurance is NOT enough

 

Most life insurance is simply NOT enough to cover for the financial losses that your death may cause. One easy way to prevent this is by purchasing additional insurance policies. Assess your policy options and choose the best among them.

 

On top of that, be sure to update your investment policies if you needed to.

 

Life insurance is NOT only for wealthy people

 

Though most insurance companies make it seem like a luxury product, life insurance is NOT only for people who live in wealth and prosperity; it’s for everyone. Fortunately, insurance companies do not discriminate between the rich and the poor. Even when you don’t have a lot of money, you can buy insurance.

 

Just like with everything else—as long as you can pay, you’re good.

 

Life insurance is NOT for you

 

Contrary to popular belief, life insurance is NOT for you —it’s for those you care about.

 

When you die (yes, you’ll die) your loved ones will not only suffer from emotional and psychological turmoil, but they could also suffer from financial chaos, especially when you’re the breadwinner in the family.

 

While it’s sad to file for life insurance because it feels like planning your own death, you must do it to ensure the future of your loved ones.

 

I mean, you just left and will just left them with nothing?  (aside from your lovely memories, of course! )

 

With life insurance, you can rest assured that your beneficiary will receive financial assistance after you passed away.

 

In short, don’t leave them hanging when you leave.

How to rebuild yourself and regain your financial status after bankruptcy?

It can be challenging to restore your financial status to where bankruptcy has not affected you yet.  However, you can bounce back!

 

What is bankruptcy?

 

through undertaking a legal process called bankruptcy, people or other entities who are unable to repay a debt to creditors may seek support for their financial obligations, such as debt.

 

These are the key ideas to get you started in your wealth rebuilding journey:

 

Track your finances and take notes

 

Becoming aware of the reasons why you became indebted and observing necessary adjustments accordingly are reasonable measures to avoid the trap of indebtedness and to kill remaining debt itself. You can also refer to these notes to keep track of your tendencies and behavior toward your finances.

 

Be sure you stay within reasonable limits so you can always make your payments on schedule.

 

Make a budget

 

Systematically plan out on how will you rise from your financial downfall. Just like the legendary being, phoenix — you have the opportunity to start anew!

 

Budgeting doesn’t necessarily mean that you don’t get to enjoy life in terms of material fulfillment. It does not mean, no more dining out in fancy restaurants, no more travelling and It certainly do not advocate someone to be ascetic. Tracking where and how you spend your budget helps you to manage your money effectively and efficiently. Remember, less is more, and in this context, less expense means more money.

 

If you file for bankruptcy, the court will help you with your present income and other essential expenses. Furthermore,  it could also likely washed away most of your financial obligations such as debts —but there might still be a remainder. Usually, you might still have to pay several debt payments, depending on the status of your bankruptcy. Moreover, after bankruptcy, you could incur additional debt.

 

Will all of these in mind, make it your primary focus to clear out all of your remaining debts. Having a concrete budget and sticking to it is your primary weapon when killing off debts.

 

Have an emergency fund

 

Possessing an emergency trust fund means that your chances of becoming in debt again will be significantly reduced. An emergency fund can cover unexpected financial expenses like unforeseen travels or medical bills. It is also helpful when distressing events occurred, for instance, unanticipated job loss or even the sudden death of a loved one.

 

Without a stash of money set aside for emergency use, you risk yourself open to loaning regrettable amount of money when things go wrong while you least expected it.

 

 

 

 

 

How to graduate in college without college loans?

These ideas will come in handy, especially if you do not want to be in debt because of a college loan:

 

Do well in PSAT/NMSQT

 

The PSAT/NMSQT or Preliminary Scholastic Aptitude Test/National Merit Scholarship Qualifying Test is both a practice test and a qualifying test taken by students to help them prepare in SAT, and also to qualify as a scholar.

 

While most students do not bother to study for PSAT/NMSQT, you should be different! Study hard, and do well in it— because you can be a National Merit Scholar!

 

PSAT/NMSQT is not ‘just a practice test’ for SAT; it also functions as the qualifying test for you to enter a scholarship program called the National Merit Scholarship Program (NMSP).

 

If you do well, you can be one of about 8,200 students who can receive National Merit Scholarship.

 

ROTC program

 

One of the ways to avoid college loans is by joining the military. Over 1000 U.S. colleges and universities offer ROTC programs; these programs provide every branch of the military such as: Coast Guard, Navy, Air Force, and Army.

 

The ROTC program can help many financially disadvantaged students to go to college. For instance, Up to $180,000 tuition aid is available at 160 schools in the USA for students of the Naval Reserve Officer Training Corps (NROTC).

 

At its simplest, ROTC is like a scholarship program, but with military service element included.

 

Look for companies that offer college tuition assistance

 

Look for a company that will assist you financially for your school fees.

 

Some companies offer to help you with your school expenditures. For instance, when you work with Verizon for at least 17 hours a week—they will pay your college tuition, if your degree benefits your present position there. Also, some hospitals pay the tuition fees of aspiring students who want to study healthcare-related courses like nursing.

 

Part-time job

 

If you want to graduate from college without loaning for it, having a part-time job may help.

 

Some schools accept their students to work for them. You can apply to be a Resident Assistant (RA) at your school. According to PayScale, $10.26 per hour is the average pay for a Resident Assistant.

 

Moreover, doing part-time jobs have become convenient. You can now work virtually anywhere, even at the comfort of your home/dorm— if you apply to be a freelance content writer or  freelance data entry encoder online.

 

Hustle now to avoid the hassle of paying off college debts later!

How you can get approved for a personal loan

Facing financial difficulties at some point in life is normal. Financial institutions exist to save you in times of need by offering personal loans.  Applying for this loan is, however, not a guarantee of getting approved. Since a personal loan does not have collateral requirements, your income and credit history determine your potential to pay back the money.

Every lender offers different interest rates for personal loans, and comparing them can help you choose one that you will be comfortable in paying. You need to choose one that comes with low-interest rates and a reasonable repayment term. For you to qualify for a personal loan, you must do the following:

Fulfill the eligibility requirements

You should only apply for a loan that you know you can qualify for. People tend to apply for personal loans without focusing on the eligibility requirements that a lender sets. This makes it hard for every applicant to qualify for the loan. Before you fill in the application form, go through the requirements of the financial institution and assess if you have everything that is needed. Most lenders require documents like income certificates and personal tax returns.

Work on your credit score

If you know that you may need a personal loan in the future, start working on your credit score early enough. Paying your debts on time can help you raise your credit score. Lenders consider numbers above 700 as good. Look at your credit report early enough and confirm that it does not have any errors such as inaccurate credit limits.

Pay off your existing debts

If you have any other loans that you have not yet cleared, you should do this before applying for a personal loan. Try to maintain a 6-month gap before applying for a new loan so that a lender does not see a new loan as a burden to your income.  Avoid going beyond your credit limits and manage your finances responsibly. If you are struggling to clear debts, try to supplement your income with a side hustle. This can boost your debt-to-income ratio.

Apply for a reasonable amount

Think of what you need the money for and avoid applying for more than you need. Since the lender has to weigh your ability to make repayments on time, requesting for an outrageous amount can disqualify you from being considered. The lender assesses your ability to repay based on how much money you earn per month.  You should apply for an amount that you can pay for without difficulties and still have enough for your daily expenses.

Avoid applying with different financial institutions

Most people assume that applying for personal loans from multiple lenders can boost their chances of getting the loan.  On the contrary, this can put off most lenders. Though you can compare what different financial institutions have to offer, only choose the best one and apply once. Limiting your personal loan application to the best financial institution can make it easy for you to qualify.

How to clear your debt even if you have a low income?

Record your finances and pinpoint the debt’s origin

 

Keeping track of where and how you spend your cash can help you effectively handle your budget. The information you receive when you record your finances can also act as a benchmark to be used for future reference. Furthermore, you can  refer to these notes so you can assess your attitude and tendencies towards budgeting.

 

It is of maximum importance to note the debt’s origin to prevent it from recurring in the future. Becoming aware of the reasons why you became indebted and observing necessary adjustments are great measures to avoid being in debt again.

 

Construct a budget plan and stick to it

 

What’s the use of creating a budget plan when you don’t stick to it? If you have a difficult time developing the ideal budget, you may want to try the 50/20/30 budget plan. It was Senator Elizabeth Warren who made it famous.

 

The 50/20/30 budget plan is  a cash allocation guide, in which 50% of your income should cover essential needs such as daily expenses and everyday necessities.

 

20% of your income should be used to meet financial milestones, such as savings, debt repayments, and investments.

 

Finally, 30% of your income should go to your wants, meaning products or services that you don’t necessarily need.

 

If you want to try the 50/20/30 budget plan, spending 30% of your income on going in a fancy vacation or dining out in an expensive restaurant, might seem like a waste of money, but in reality—you’re just sticking to your budget!

 

Some people might not agree about the allocation of cash in this budget plan; if you are one of these people, you are free to tweak the 50/20/30 percentage to suit you better.

 

Moreover, to efficiently track your budget—utilize everything available to you. Use notebooks to note each of your financial transactions and expenses. You can also use software programs or computer spreadsheet like Microsoft Excel to help you visualize your finances.

 

Sell stuff you no longer need

 

Maybe you have some stuff that you no longer need, rather than letting it rot, why not sell it?  Selling preloved items is one way to earn extra money; it also became relatively convenient.

 

You can even sell your preloved items online!

 

Increase your capacity to generate income by doing the following:

 

  • Ask for a salary raise
  • Take paid survey
  • Investing
  • Create a blog and monetize it
  • Babysit
  • Tutor
  • Getting a side job

 

Avoiding debt like the plague: Three ways to efficiently keep yourself away from debt

Avoiding debt is easy… on paper. But in practice, it’s difficult, and sometimes it almost seems impossible—especially when you’re trying to make both ends meet.

 

If you cannot pay your debt anymore, severe complications may arise. Legal repercussions such as foreclosure can happen.

 

One of the most common mistakes of those who become trapped in debts, is they ignore it when it was small. Interest rates may seem manageable, but it can accumulate over time.

 

Feather-light weight debts can transform into a solid boulder that will only grow bigger as it avalanche when left unchecked.

 

Here are surefire ways to avoid debt:

 

Manage your finances

 

To effectively manage your finances, it is wise to track your income-to-expenditure ratio. Keep a financial diary. Document all of your financial transactions there. Record your income and list all of your expenses. It will help if you teach yourself some basic accounting ideas to help you in journalizing all of your finances.

 

Keeping tabs with your financial status is one sure way to avoid debts.

 

Create an ideal budget plan and stick with it

 

Stick to your budget plan like your life depends on it, though this might sound exaggerated, but when you think of it—you are literally dependent on your budget to live.

 

Making an ideal budget does not certainly mean that you don’t get to enjoy life in terms of material fulfillment. It does not mean no more partying, no more dining out in expensive restaurants, or no more buying fancy smartphones.

 

However, sacrificing the desire for early material gratification, in exchange for a better financial status in the future, will help you ensure a luxurious way of living later in life.

 

Emergency funds

 

The importance of having an emergency fund is often overlooked. Possessing an emergency fund is one of the most vital measures to help you avoid incurring debt.

 

An emergency fund is a stash of money put aside to be used in an emergency.  It could cover for grave emergencies, such as unexpected job loss or even the sudden death of a loved one. It’s important enough that most, if not all, ‘financial gurus’  advocates it.

 

But most people don’t bother to create one. As if they can see right into the future and can be instantly prepared when emergencies happen.

 

Where will you get money if you need it urgently?

 

Keep this in mind: Without an emergency fund, you risk yourself open on loaning vast amounts of money.

How you can acquire the right minority business grants and loan

Are you a minority entrepreneur looking for business financing?  Though most minority owners generate a lot of revenue for the government, they often face similar challenges. Getting grants and loans for your business may not be that easy. Special interest groups often offer grants to minority-owned businesses who meet particular standards.

Failing to meet these standards can prevent you from getting a loan or grant. When applying for a grant, you should only apply for one that you can qualify for to avoid wasting time and getting frustrated. Without the right resources, you may have problems with finding the right loan for your minority-owned business. The following tips should help you out.

Selecting minority business grants and loans

Prepare all your documents and create a business plan

Most of the groups and lenders that offer this financial assistance may ask you to submit a business plan. Having one helps you rule out some of the grant and loan options that are not right for you. Creating one early enough can also save you time and help you meet the deadline when applying for a grant.

In your plan, you should include all the relevant details that show the potential of your business to grow and how it can help the community. This plan can make it easy for you to get approval for the loan or grant.  Before you apply for a loan or grant, you need to gather all the business documents that the lender may require. Ensure you have documents regarding tax returns, file statements as well as your business license beforehand.

Look for grant opportunities online

Though loans are useful, getting a grant saves you from making any repayments. That is why you need to conduct a lot of research and identify the government agencies that offer various grants for minority-owned businesses. For instance, sites such as Grants.gov can help you identify numerous grants that you can apply for. Try to be specific in your search by using filters so that you can find those that can help you fulfill your business needs.

Ensure that your business is certified and registered as a minority-owned business. This helps you get easy access to different grants and also simplifies the application process. Create an account at such sites and look for grant opportunities. You can also get assistance from some of the business centers which recommend the best grants for minority-owned businesses.

Consider local options

While most of the minority-owned businesses prefer federal grants, you should not overlook local grants. Some of the local business groups support minorities by giving them grants. Try to identify any group within your area that offers funding opportunities for minority entrepreneurs. You can use the internet to simplify your search.

Participate in small business grant contests

Sometimes, groups organize grants contests for minority entrepreneurs.  If your business looks profitable and can help the community, you may end up being awarded a good amount from the contest.

 

 

 

A parent’s guide to help your teenager when investing

Below are investment ideas to help your child make their first investment:

 

 

Savings Account

 

Handling money and managing it well are two of the most vitally important aspects of a successful investor. Before your teen begins investing, teach your child practical money skills by opening him/her savings account. Saving money also allows your child to get the money that he/she needed to fund his/her investments.

 

Educate your child on how to save money and how to budget. Let your child manage his/her finances to gain experience that he/she can later use when he/she starts to invest.

 

Open up a UTMA account

 

Parents cannot just transfer a property to their minor child, but must instead transfer the property to a trust. Minors are not entitled to contracts in most countries, which means that they cannot possess bonds, inventories, mutual funds, or life insurance.

 

One of the most well-known trusts especially made for minors is the custodial account called UTMA (or Uniform Transfers to Minors Act)

 

Through the UTMA account, the teen can experience varying investment opportunities. Setting it up is an excellent way to assist your teenager when they start to invest. As it has been previously stated, UTMA account can be established with a wide range of investment accounts. So you can make your child choose what investment account suits them better.

 

With your supervision, you can let your child be immersed about the wonders of investment.

 

Note: Since the assets are considered as the property of the minor, some of the investment income will not be taxed. An equivalent amount is taxed at the tax rate of the child, rather than the percentage of the parents.

 

Certificate of Deposits (or CDs)

 

Certificate of Deposits pays interest rates a little higher than savings accounts. For a particular time, CDs require you to lock your funds until the date of maturity.  In exchange, you’re going to get a greater rate of interest. There are a lot of options for your child to choose from when they purchase CDs.

 

Roth IRA

 

Roth IRA is an after-tax pension account that you need to fund. All future withdrawals that comply with Roth IRA’s regulatory requirements will be tax-free — investing in Roth IRAs only applicable to those who have earned an income. So if your teen has already done a summer job, he/she is eligible to invest in Roth IRA. Encourage him/her to save up his/her income and invest it in an Individual Retirement Account.

What credit rating is required during purchasing a home?

Are you a first-time homebuyer? One of the crucial determinants in securing a mortgage is your credit score. The three-digit numbers sometimes make buying a home difficult for some people. For you to get a mortgage for your house, you need to have a good credit score. This can help you get favorable loan terms as well as reasonable interest rates. Understanding how credit scores affect your ability to get a mortgage can help you get close to achieving your dream.

Since mortgages differ from one lender to the other, there is a need to compare various lenders for you to get one that you are comfortable with. Each mortgage comes with different requirements, which include a minimum credit score that you must meet. Before you look at these conditions, you should first look at your credit report to find out your current rating.

Most credit bureaus let you access this information at no cost. Looking at your credit report before applying for a mortgage gives you a clue as to what financing you can qualify for. You also get to understand the type of house you can afford. You should print this report regularly so that you can identify and correct any errors as soon as possible.

How does the mortgage industry work?

Everyone wants to be a homeowner, but few people can achieve that. This is because the bank uses certain criteria to determine who can qualify for a mortgage. Your credit score and income play a significant role in determining this. Some lenders sell loans to other lenders as a way of freeing up some of the capital to lend other consumers. As the borrower, you have a right to know that selling a mortgage from one lender to another happens.

Different forms of mortgages also have various credit score requirements. For instance, if you want to apply for an FHA loan, you should have a credit score of above 580 for you to qualify for the loan. Mortgages such as VA and USDA need a minimum credit score of 620. Even though you have attained these numbers, it does not guarantee you automatic approval since mortgage lenders have to consider other factors.

Even when you have a good credit score, you may be denied a mortgage if you fail to meet the rest of the requirements. For you to increase your odds of qualifying for the loan, you should put forward a substantial amount as a down payment. This reduces your risk and helps you secure a mortgage with affordable interest rates. The mortgage lender also considers your savings as well as the debt-to-income ratio. Your employment history is also a factor that the mortgage lender considers before approving you for the loan.

When buying a home for the first time, we recommend that you apply for the FHA loan. This is easy to qualify for even when your credit score is not very high. Despite getting the loan, it is crucial that you work hard to raise your credit rating for future borrowing.

Can you pay off your loans early?

With the right financial strategies, debt can help you secure your financial future. Loans could provide the initial financial backing to help you get started with your investment. Many people use debt to leverage their financial freedom, with the financial support provided enabling growth. Paying off loan debt early is an appealing option to these borrowers, who may then consider getting new financial backing. But, should you pay off your debt earlier than you need to?

Why you should consider an early payoff

Loans can be burdensome on the borrower. You will be required to meet certain repayment terms for an extended period, depending on the size of your loan. For many, this long term financial commitment is too limiting. Having an active loan could affect your credit score and reduce your ability to get better terms when borrowing, which could limit your financial planning. It is important that you consider paying off your debt early to avoid expensive loan products or alternatively waiting for long amounts of time to get the best terms on your next financing.

Loans will attract interest over time. If you pay off your loan quicker than the expected duration, you will reduce the amount of interest accrued. This will work to minimize the cost of your loan. Did you know that it doesn’t take a large financial outlay to pay off your loans early? You can do this by meeting your monthly interest repayments, and adding in a bit more to reduce your principal. Taking up a bi-weekly repayment schedule as opposed to a monthly repayment, for instance, will help you cut down your loan repayment term by up to 3%.

For people with variable interest rates, paying off your loan early could help you take advantage of the lowest rates accessible for an affordable loan. You may need to contact your lender, since these types of loans usually attract some penalties with early repayment.

Why alternative financial planning could be ideal

Some loan options will attract penalties for early repayment. It is important that you look into the terms of your loan product when borrowing to make sure you can pay off your loan early. In the event that it attracts penalties, you should assess the costs involved to determine whether the loan product will be affordable and valuable to you. If you are not comfortable with the terms involved in an early repayment structure, you could consider alternative financial planning.

Financial experts recommend that you take up investment as opposed to paying off debt.  On average, stock options will have a 5-6% rate of returns every year, with prudent investors taking in up to a 50% growth on their outlay. By paying off your loans early, you may be taking up the less lucrative option. The right investment strategy could help you increase your financial standing, helping you address your loans in future while reducing your need for financial support through more loans.

However, investment carries some risk. With the wrong investment strategy, you could end up with no returns and a nagging debt. Do you have the skill, interest and willingness to invest in the long term to help overcome your loans in future? Are you willing to take the risk of investment? If you do not feel up for it, paying off your loans early could be the better course of action towards achieving financial freedom.