Posts Tagged ‘Car finance’
Many of us have made New Year’s Resolutions-
some to improve our personal health, others to improve relationships, and many to improve our financial health. Often times we would like to see a little less debt, more of our paychecks going towards the things we desire or healthy savings account instead of drowning it all into paying the accumulated debt. Other times we can be looking to secure better financial health to work towards big purchase goals, like buying a house or a new car.
When we consider things like a practical mortgage or car payment, we often have a set number in mind – to make sure we are in the range we desire, there are a few steps.
First, start a savings account,
make sure it is within your means. If you only have an extra $100.00 of disposable income after bills, groceries, and gas, consider putting away maybe start with $20.00. Remember to take a look at where your discretionary income is going first. Do you only have an extra $100.00 left at the end of the month because you make a coffee run every morning? Even $3.00 five days a week can lead to $60.00 a month gone, instead of investing half that into a decent thermos and taking coffee to work. Or maybe you treat yourself to lunch a few days a week at work – the average lunch costs $7.00-$8.00; that’s if you keep it simple. Take a fine-tooth comb through your spending and see where it could be cut.
I know we all need groceries, too, but keep in mind, are you purchasing things that you are not eating? For example, do you tell yourself you will take a salad every day for lunch then end up eating out twice a week? Often we enjoy fresh fruits and vegetables, but if you are trying to keep yourself on a restricted budget, you can find excellent substitutes in the frozen foods section that contain less sodium.
Review your bank accounts
Check for things you may have set up on auto-pay that you may not be using. There are plenty of apps and websites that can help with this now. Streaming services, gym memberships, other various memberships, which you may have forgotten over time. PCMAG has a great article featuring applications like TrueBill and Trim to help you decide which program might work best to cancel these unnecessary subscription services.
Know about your credit
Naturally, the best way to help boost some credit is to keep your revolving balance on the lower end because this will help keep your debt to income lower. Applications and websites such as credit karma (which is free) can help you track revolving balances, accounts in collections, and other delinquency marks. It can give you a baseline idea on where your credit ranks – it’s not 100% accurate; however, the other tools provided can be extremely beneficial to get you on the right path.
Paying off collection debts and keeping a lower revolving balance are going to be beneficial to credit score maintenance – and keep in mind if you are shopping for a new car paying off the balance of your old car isn’t quite the priority. Using credit karma in conjunction with tools like Kelly Blue Book can help, so you are rolling negative equity from your trade into a new car.
Know about your car
If you decide to use Kelly Blue Book, do keep in mind this is not an estimate, not an actual quote from a dealer. Also, be honest with yourself when getting a quote; a few cosmetic problems are one thing but, if you are missing hubcaps or have serious issues, don’t like your car in excellent condition.
Shop Around and Get Friendly
Also, if you are considering a vehicle purchase- shop around – get some pricing and talk to a finance manager while you are there. They can help to advise you on a few things – if you have old accounts with no balance, should they be closed out or not? Realistically how long until you will be making this purchase, they may be able to offer some advice. Finally, what kind of down payment you might need to put your payments where you would like them to be and what kind of credit score you may need to achieve that financing. Stopping in and becoming friendly with the dealership you are planning on purchasing will only benefit you because you will learn about – and maybe even receive a heads up – when the best deals for your ideal purchase are. Also, if you have never considered anything like this before, it will help you establish if you need to lease or finance a vehicle. If you have never considered leasing before this might be the ideal time – it offers a lot of benefits long term, such as always being under warranty, often you can receive free or low-cost services on the vehicle.
Most important, set a realistic timeline for yourself – no less than at least 90 days. Often when items are in collections or paid off, it takes up to 30 days for it to reflect on your credit. Also, this will provide more time for you to save so you won’t be putting large chunks of your income aside and sacrificing other things you may want. If you resolved for better financial health in 2020 – start now and take this year by storm.