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A blog dedicated to providing readers information for all of life's financial decisions

Are you Financially Fragile?

Are you familiar with the phrase ‘financially fragile’? It’s a phrase economists use to describe people who would not be able to pull together $2000 cash within 30 days. A study conducted by the National Bureau of Economic Research shows that more than a quarter of Americans fall into the financially fragile category. Even Vice President Joe Biden recently made headlines for declaring he didn’t have an emergency savings account ready to go.

While $2000 cash sounds like a lot of money (and it is), it represents what many people typically need in the event of an emergency such as a major car repair, unforeseen medical bills, or mandatory home repairs.

If you’ve suddenly realized that you’re financially fragile, there is no need to panic. But you need to start saving immediately to reach (and exceed) that coal of having $2000 emergency cash. Here are some ways you can do it.

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Understand The Difference Between A Want And A Need

One of the most basic concepts when it comes to saving money is that we must learn how to determine our wants vs. our needs. No matter where you seek financial advice, you will see, or hear, that seemingly simple concept over and over again. 

At first glance, it does seem simple. Our needs are the things we we must have to sustain us day to day: food, shelter, clothing, personal care items, and in most cases safe, reliable transportation. Just about everything else can be classified as a want (though at times, it may seem like a need)- entertainment, electronics, leisure travel… the list of things we want is potentially endless. 

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How to Maintain Your Sanity and Pay Down Your Student Loans

It pays to understand federal student loan repayment plans especially if you have been making payments on student loans for years or you are just starting to pay them back. You can choose to switch to a new repayment plan even if your loan servicer has already set your monthly payments. This is definitely going to help you if money is tight while you need to lower your payments or if you want to pay off your loan faster than before.

It is important to understand what is available with all the repayment plan options as well as with those that share the same similarities with one another. By so doing, you can make the right choice that best suits your needs.

When it comes to repaying federal student loans, you may be out of luck if you took out private student loans too. However, several repayment plan options can be obtained from many private loan servicers. To this end, there is no harm in asking. Also note that with these plans, you are not required to lower your interest rate. You will need to consider private student loans if you want to refinance a student loan to a lower rate. Here are some options to take a look at

Standard Repayment Plan

When setting your monthly payment amounts, you should know that it is the 10-year repayment plan that was most likely defaulted to by your loan servicer. This plan which is set up to repay the loan in 10 years requires you to pay a set amount each month. Your standard repayment plan payback time can take about 30 years if multiple loans are consolidated into one large unit. However, this depends majorly on your consolidated loan amount and terms.

Refinance Loans

Refinancing refers to the act of finding replacement for multiple student loans with a single, new, private loan. Whether it is a private loan, federal loan or a combination of the two, these loans can be replaces by a single loan (private). To get a better rate, you can use a co-signer, however, when it comes to determining your new interest rate, your credit score will be heavily weighed by your lender.

Student Loan Consolidation

This is a smart option to follow if you are looking to combine your federal student loans into a single direct consolidation loan. Instead of paying separate bills to different services, you can apply for student loan consolidation which deals with having a single monthly payment to keep track of.

Unlike refinance loans, the government pays of the loans when you consolidate your federal loans while ensuring that they are being replaced with a direct consolidation loan. Based on your total federal loan balance, a new repayment schedule will be assigned to you by the government after applying for consolidation.

Pros and Cons of an Online Education

Despite significant coverage of online education in recent years, finding a balanced perspective can be remarkably difficult since conversations tend to be highly partisan. Online schooling is either presented as the inevitable and awesome educational wave of the future or talked about as a cheap facsimile of the traditional classroom experience.

For potential students trying to make a decision about their own educational journeys, this can be confusing and even distressing. You certainly don’t want to choose the wrong path for yourself, so how can you know if an online degree program is the right option for you?

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Common Mortgage Pitfalls to Avoid

It is said that a mortgage is the biggest debt many people will ever have to carry. As the case is with everything in life, there are risks associated with taking out a mortgages – risks that can escalate into nasty situations should they not be navigated properly. Simple mistakes can be made which sometimes leads people to pay more than necessary for their home or to lose their home in extreme cases. These mistakes are avoidable and some of them are discussed here to help inform the decision making process of prospective borrowers.

  1. FAILING TO COMPARE OFFERS- People are more concerned about picking out a house today than they are about partnering with the right lender. According to the Consumer Financial Protection Bureau, more than 50% of Americans only consider one broker or lender while applying for a mortgage and 75% fill out their applications with only one broker. This situation is an avoidable pitfall, by considering many different brokers and lenders, prospective home owners can compare the numbers from all sides and ensure that they are getting the best value for their money – not just what is being offered.

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Pros And Cons Of Refinancing A Mortgage

Refinancing simply involves paying off one debt with another. Expectedly, the new one being taken on must have some incentives to make it a better option than the existing debt. People decide to refinance mortgages for a variety of reasons and analysts reckon that this can be done at any time during tenure of the mortgage, some are however of the school of thought that it is best done right before retirement.

Refinancing a mortgage just before retirement is also a two-sided coin of its own. Discussed here are some of the reasons to consider it and some attendant downsides such a decision can bring.

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What Is Useful About Student Loan Consolidation

There is no doubt, it can be a nightmare to pay off your student loans. However, there are ways in which this can be simplified. For example, many folk find that the student loan consolidation is worth looking to. This particularly relates to someone who has a lot of loans in various areas. When you merge these into one loan, you will make things easier on yourself.

If you are leading a busy lifestyle with a new job to focus on, you will find that it is easy to miss a payment. This can obviously cause interest rates to rise. You will also stay a lot more organized when you set yourself a personal budget, along with a repayment plan. This is definitely something worth looking into.

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How To Eliminate Debt With A Personal Budget

It is a shame that youngsters are not taught more about how to construct a personal budget in the education system. This is a life skill that one should know more about because it can obviously help you on a daily basis and avoid personal debt which accumulates really quickly.

In saying that, it is not difficult to get into a habit of planning your own budget. When you know how much you have spent on a monthly basis, you will be able to see where the money is going and how you can rectify certain situations, depending on your income.

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Last summer of Freedom? Not From Your Debt!

Alright, summer is officially here, graduation parties are over, the congratulations of relatives are beginning to fade and you are ready for your last summer of freedom. Sounds great, but recent college grads with personal debt to finance their future careers can’t really afford an “I’ll do it tomorrow” attitude.

Along with sun and beaches needs to be careful consideration of the proper way to approach student loan relief or student loan consolidation. This process may take longer than many might expect, unless of course you’re expecting the President to pay for it. Note the sarcasm? Yes you can’t rely on the Obama Student Loan Relief program, because it’s an urban myth.

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Finding a Mortgage you can Live With

Every realtor in the country is claiming that now is the best time to buy a home. You need to think carefully about money before you drink the Kool-Aid and jump into mortgage debt that your personal budget cannot support. Your credit future and your future financial position are as important as your desire to live the dream of home ownership.

Preparing yourself for owning a home requires a defined plan of financial analysis on your part. Do not expect someone that is eager to sell you a house or thrilled at the possibility of scoring a loan to be exactly honest and completely truthful about how much house you can afford. There are people that are honest but you will find that doing the homework yourself is better than taking another person’s word that will not be responsible for the mortgage debt.

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