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What is a Good Reason to Refinance a Car?

August 4, 2022 By Susan Paige Leave a Comment

What is Auto-Refinancing?

Auto-refinancing is said to hold when you change your decision about continuing a contract with your initial car loan financier and have chosen to initiate a new deal with another lender for reasons that will benefit you in the long run.

Several reasons could prompt you to take such a decision which may include lowering your monthly interest payments, reducing the overall loan amount/balance, or extending the contract period for flexibility.

Thinking about Refinancing your Car?

Yes? Then, you are on the right page! But let’s first get acquainted with what you may fail to understand or lose from auto-refinancing before dwelling on the benefit which actually brought you here.

Did you know auto-refinancing could be detrimental to your credit score? The extent to which it can affect your score could be so bad that recovery becomes impossible. That is likely to happen if you do not wait long enough to regain your score status before choosing to refinance your auto.

The Cons of Refinancing your Car

It is important to be aware of the consequences that may arise from taking the path of auto-refinancing. Therefore, it is a huge benefit to consider the following drawbacks involved in auto-refinancing. They include:

Over-extension of Loan Repayment Period:

The only reason why most people boycott the idea of auto refinance is the prolonged lifespan of the new contract. Any other con is a result of this over-extension. So, weighing the benefits of the juicy package you have discovered would definitely supersede its drawbacks.

This may sound strange but this drawback is even a huge advantage in disguise if you look at it critically. Imagine how convenient it would be to have the opportunity to repay a loan to suit your monthly income and credit worthiness. Then it should be a relief to know that you can take as long as it will favor you to settle your debts.

Age of Vehicle:

You should be aware now that old cars usually attract higher interest rates than new ones. Cars between the age range of 5 to 12 years are considered too old to fetch enough profit for the company in a situation of swapping for a different choice or replacement following an accident according to insurance policies. Therefore, be wise to check with the new lender before you refinance your auto to avoid any misunderstanding or regrets after signing the new contract.

Inform the new dealership of your vehicle age, model and preferred repayment terms before you approve any scheduled meeting or append your signature on supporting documentation. That will prevent any breach on your part when you realize that they are charging you extra above the rate you initially presumed was their standard charges for regular vehicles below 5 years old.

Now,

What is a Good Reason to Refinance a Car?

It basically points towards enjoying “Flexible Payment Conditions/Terms” which can be discussed in the aspects highlighted below:

Reduced Interest Rate:

Having a very low interest rate to offset installmentally over the course of any contract is worth giving a try when compared with an existing contract term involving a higher rate. This is the first good reason why you shouldn’t shrug off the idea of refinancing your car.

A lot of car dealers gain enormous profit from the accumulated interests paid by their customers over time to boost sales and business transactions for the overall success of the company. Therefore, no lender would withhold from rendering their services to any client willing to strike a fair deal with them.

Provided the deal will favor both parties, you as the client must be ready to accept the moment you hear that the interest rate requested by the lender is within your financial capacity. Otherwise, it would do you greater benefit to remain with the present financier or continue with your previous contract conditions at the same company.

With a lower interest rate, consider yourself a business mogul/guru. You are on top of the game. Loan repayment becomes much more flexible for you because of your ability to make the best choice. Regarding this factor about low interest rate, you would need to first gather substantial information about all car dealers/lenders within your geographical location. Proximity to your residence matters because if you fail to weigh the cost of transporting the vehicle to your destination, you are as good as a reckless spender.

High Drop in Monthly Payments:

This is another benefit also woven around the major reason for embarking on the “auto-refinance journey”: Flexible Payment Conditions/Terms. Aside from enjoying a favorably low interest rate, it would profit you to also enjoy offsetting your loan in meager installments. Although the contract period may seem longer than it was with the previous arrangement, it is best to opt for a less burdensome repayment package.

You may be thinking about how the total amount paid in the long run may also be higher than if you were to pay within a shorter period. Do not be perturbed because what matters is how you are able to manage your monthly income/finances. Your monthly budget and expenses must balance to avoid a financial strain on your savings and credit score.

Is it Worth It?

Absolutely! Because the benefits outweigh the drawbacks. Consider how much good it will do to your finances without you breaking the bank to just to service a car loan. You are able to meet your personal needs while being mobile without wasting resources excessively on car hire like uber. Infact, the funds that will go on commuting commercially or moving around via public means daily is enough to purchase an SUV outrightly.

Remember we take loans to give us the freedom to pay later and also enjoy the item/product even before we complete the payment. Hence, making an outright payment even if you have the ability to do so is not financially advisable nor a wise step to take.

Do it Now!

Why procrastinate when you can save yourself from financial stress? Take that bold decision and refinance your auto NOW!!!

7 Expensive Legal Mistakes You Should Be Avoiding

July 13, 2022 By Erin H Leave a Comment

Businesses are always looking for ways to save finances by cutting costs. They view legal services as a less important expense and use the internet to do their things instead of hiring a lawyer. This strategy could be costly and put their business at risk.

1. Not Documenting Agreements

Do you recall the last business strategy you discussed with your partner? You didn’t document it. Now you need to make a big business decision, and you can’t recall what you agreed on. That will become a big issue. Business owners need documented agreements. Oral agreements or handshakes can be binding, but it’s difficult to determine what you agree upon after months or years. You may be okay today, but resolving a disagreement can be costly. Less than 1% of civil lawsuits are estimated to go to trial.

2. Not Choosing The Right Business Entity

It is crucial to choose and set up the right business entity. You can choose a general partnership, a sole proprietorship, an LLC, or a corporation. All these entities have pros and cons and tax consequences. Choosing the right business structure and setting it up legally is important. If you don’t choose an entity or choose the wrong one, you could be held personally responsible for your business’s actions and face tax problems.

3. Handling Workers Incorrectly

The first step is to be sure you’ve classified team members correctly as employees or independent contractors. Misclassifying your employees can lead to worker’s compensation fraud and additional taxes for employees you treat as independent contractors. If you don’t know how to classify workers, contact your lawyer and ensure you have an employment manual with detailed policies and procedures. You may also be liable if you mishandle employees when drunk. California’s legal blood concentration limit is 0.08%.

4. Not Having an Advisory Team

Many small businesses avoid hiring attorneys to save finances. Some get legal documents online to represent themselves. This is risky because they don’t know if the sources are credible or if the documents are complete. If you enter into a legal agreement that doesn’t safeguard your interests, it could cost you more than hiring a lawyer and endanger your business.

5. Inadequate Intellectual Property Protection

Many businesses, especially non-tech ones, believe they have no intellectual property. They forget that maybe they have a website, trademark, or copies that need protection. A business may require legal assistance in copyright, product, and trademark disputes. If you ignore intellectual property, you’re not protecting your rights and property ownership. For instance, if your workers invent new technology, make sure the employment agreements state that the inventions will be assigned to you.

6. Starting a Competing Business While Still Employed

You shouldn’t start a competing business while you’re still employed. If you plan to compete with your current employer, do so in a way that protects you if you’re sued. Check your employment contract for non-complete provisions. If so, consult a business attorney to ensure you aren’t violating them. If you start a competing business, get insurance to mitigate your financial losses if you are sued.

7. Not Having the Correct Type of Insurance

You need to protect your business finances by knowing what insurance you need. You need personal and business insurance and life and disability insurance. Agents get their pay through commissions, so they can convince you to buy more insurance than you need. Insurance coverage protects your business if you are caught on the wrong side of the law. A DUI in California can result in six months of license suspension, but if you’re a business owner and are caught drinking and driving in a company vehicle, these penalties can be a lot worse, not to mention the detriment to your business’s image. Consult a reliable agent to help you choose the right insurance.

Starting a business can be overwhelming. Getting startup finances and managing business affairs. Dealing with legal affairs is probably the last thing an entrepreneur wants to handle. They don’t see the need until it’s too late. The truth is that legal mistakes can ruin your business.

How YNAB Changed Our Finances

February 21, 2022 By MelissaB 2 Comments

Years ago, when my husband and I were first married, I had a budget binder. It was simply a spiral notebook, and on each page, I put a different budget line item such as “groceries” or “electricity.” Each time we were paid, I put a certain amount in each category. When I paid a bill, I deducted the amount from that category. It was a tedious process, especially in a category that had a lot of deductions, like groceries. In desperation, I started researching budgeting software. I tried several before finally settling on You Need a Budget (YNAB). There are so many ways that YNAB changed our finances!

What Is YNAB?

You Need a Budget (YNAB) is a budgeting software based on the envelope system of budgeting.

The YNAB Principles

The YNAB system has four principles.

Give Every Dollar a Job

Using YNAB, you should budget every single dollar that you receive. Doing this helps you map out how to spend your money. If you have $40 left in your grocery category, you might need to have a small shopping trip and eat up the items in your pantry so you can keep within your budgeted amount.

Embrace Your True Expenses

Your true expenses are not just the ones that are due every month. You also have to budget for those expenses that you only pay once or twice a year like car insurance, property taxes, home insurance, and car registration. You should also budget for irregular expenses such as vet and medical bills.

Roll with the Punches

Your budget is flexible. If you only have $40 left in your grocery budget but your food costs $75, you can move $35 from another category to cover the overage. Things happen—roll with the punches.

Age Your Money

The age your money principle refers to how long it takes you to use the money that comes in. If you have money coming in that you don’t have to use for 30 days, your money is 30 days old. The longer you use YNAB, usually, the older your age of money is. Currently, our age of money is 73 days.

YNAB Trainings

YNAB has many free training videos, so you can watch those to learn more about the principles in YNAB and budgeting. In addition, the creator of YNAB, Jessie Mecham, wrote a book, You Need a Budget: The Proven System for Breaking the Paycheck-to-Paycheck Cycle, Getting Out of Debt, and Living the Life You Want, that you can also read to learn about the YNAB system in-depth.

How YNAB Changed Our Finances

I started using YNAB over six years ago, and the program has revolutionized how I handle our finances.

Electronic Version of My Budget Binder

At its core, YNAB is an electronic version of my old paper budget binder.

Easier to Use than Paper

However, using YNAB is so much easier! All of those calculations I used to do on paper? YNAB does them automatically.

More Flexibility

Plus, when I put in an expense, I have the option to split the cost into several categories. So, if I spend $70 on Amazon, I can split the expenses into separate categories such as $45 for groceries, $15 for toiletries, and $10 for spending. I love that flexibility, and the process is so much easier and quicker than doing it by hand.

YNAB Is Portable

Plus, I can always consult my YNAB budget on my cell phone. I never carried around my budget binder previously, so I would have to guess how much I had left in each category.

Create a Budget Buffer

Besides being easier to use than my clunky budget binder, YNAB taught me new budgeting principles such as creating a buffer. When you first start using YNAB, you’re encouraged to create at least a one-month buffer. That means that slowly you start covering next month’s expenses with this month’s money. Say, at the end of the month you have $150 leftover. You don’t go out to eat to celebrate. Instead, you take that money and put it in some of your categories for next month. Then, slowly, you keep adding until you have all of your categories for next month covered with this month’s money.

Having a buffer gives you an automatic one-month emergency fund and gives you a sense of security. It also makes budgeting easier. You can pay all of your bills at the beginning of the month instead of waiting until you get your paychecks during the month because the money is waiting to do its job.

Can See Your Finances in One Glance

What I love most about YNAB is that my husband and I can see our finances at a glance. Since I do all of the budgeting, YNAB allows my husband and I to sit down every one or two weeks and together look at where we stand financially. My little budget notebook never made much sense to him, especially because he’d have to flip through 20 pages to see the amount of money in each of our categories.

Easy to Track Net Worth

The best feature is the net worth feature. Often when we feel like we’re not making much progress financially, we look at our net worth and see that we are improving our bottom line. We sit down together at the end of each month to go over our net worth.

YNAB’s Price Increase But We Kept It

Recently, YNAB had a significant price increase. I thought about searching for a cheaper budgeting software. However, my husband said no, he wanted to stick with YNAB. He feels it is a valuable tool that makes budgeting and money management easier for me. In addition, he loves how easily he can keep up to date with our finances thanks to the program. He feels that YNAB is well worth the price, even after the price increase, so we’re staying.

Final Thoughts

YNAB has changed our finances and made them so much easier to manage. If you’re looking for budgeting software, I highly recommend You Need a Budget.

6 Unexpected Baby Expenses to Budget For

How to Feed Your Family on a Low Budget

P.s. if you’re looking for a good all around quality site to review while you’re working with YNAB, consider Moneycrashers.com. I’ve been following them for year – and their advice is generally really solid.