Car title loans are advertised as a way for those with marginal credit to get a large sum of money quickly. Because the underwriting on these loans is minimal, nearly anyone that has a car can get qualified for a car title loan. According to a Federal Deposit Insurance Corporation survey, roughly 1.1 million households in the United States took out a car title loan in 2013. If you are considering applying for a car title loan, there are some things that you should keep in mind.
Car title loans can be a valuable financial option for those with a poor credit score or a spotty credit history. The loan is secured with the title of the car as collateral. In most cases, there is no credit check to get a car title loan. Residents of Michigan with bad credit can receive a car title loan to help their debt problems. College students that have just started establishing their credit can apply for a car title loan to pay their expenses.
The amount of money that you will be able to receive as a loan will vary depending on the type of car you drive. When a car title loan company is considering your application for a loan, they will want to view the underlying collateral – your car. The company representative will inspect your car to determine its approximate resale value. After the inspection, they will provide you with a loan amount that is a percentage of that value. This ensures that they will be able to recoup their losses if you were to default on the loan and the company assumes ownership of the vehicle.
The amount of time you have to repay the loan will also vary. Car title loans typically have repayment terms of between one month and two years depending on the size of the loan and the state where the loan was originated. Larger loans naturally have longer repayment terms in most areas, however some states have mandated that short term loans have repayment terms that are no longer than three to six months.
You can get a car title loan either online or from a local lender. Once the loan application has been completed and the required documentation supplied, the loan will be issued to you as a check or as a direct deposit into your bank account. Be sure to read all of the terms and conditions of the car title loan before signing so you know exactly what you are agreeing to.
You know how much money is coming in, and it should be more than enough to make ends meet and even put away a little something in the savings account each month. So, why does it seem like you have to stretch every cent once you reach the final days of every month? And why hasn’t your savings account seen a deposit since you got that birthday check from your Gram-gram last November? We think we might have the answer.
“Beware of little expenses. A small leak will sink a great ship.” So said Benjamin Franklin, great American inventor, statesman, and all around revolutionary guy. As one of the smartest dudes in American history, we think he’s worth listening to. So, let’s all take a moment to reflect on this knowledge he dropped way back in the day. If we’re picking up what ole’ Ben was throwing down, and we think we are, here’s the gist: no matter how sound your financial ship might seem, how padded the bank account, those little pleasures, those petty little purchases we make day in and day out that seem so small as to be insignificant, they add up, and quick! Maybe you won’t find yourself destitute and out on the street because of them, but you might find that the new car or new house you’ve been dreaming about or that college education for your children remains out of reach. Do you really want those ships to sink?
So, just where are those leaks? While we don’t know your exact spending habits (because that would be creepy), we do know a few things about how people spend money today. So read on to discover three of the most common financial leaks that plague our bank accounts: coffee, cigarettes, alcohol. Don’t worry, we’re not telling you to quit these things. We want you to save money. That said, each of these habits could lead to substantial financial leaks.
Coffee. When you make coffee at home you’re spending mere cents. Buy that same cup of joe at Starbucks and you’re paying over two dollars. For a small! Don’t get us started on lattes and blended coffees that cost between four and six dollars a pop. Do that every day and you’re spending around $120-$180 a month. No offense, but that’s insanity. So what to do? Make your own coffee at home and at work and occasionally treat yourself to coffee out. It won’t kill you, we promise. In fact, cutting out all of that sugar will do quite the opposite.
Cigarettes. A single pack of cigarettes can cost anywhere between $6 and $14, depending on the state you’re in. That’s between $180 and $420 per month if you’re a pack-a-day smoker. The irony here is that you’re paying money to slowly kill yourself. That means medical expenses later on in life due to the toll cigarettes take on your body. We said we wouldn’t tell you to quit them, and well, we lied a little bit. Switching to vaping (e-smoking) has both immediate and long-term financial benefits. For instance, with NJOY vaporizer kits, you can get up and running with all the gear you need plus e-juice for as low as $49.99. And because vaping doesn’t carry the same health risks that smoking does, you’ll likely save money on medical fees down the road.
Alcohol. The cost of drinking every day can get pretty high, depending on your particular poison, as the bartenders like to say. Two glasses of wine a night—if you’re drinking, say, $8 bottles—ends up costing you $120 a month. That’s assuming you can stand the $8 stuff. If you’re palate is more refined, it’s going to be hard to dip below $12 a bottle, which brings the total to $180 a month. And it only goes up from there. Of course, drinking every day—even within the surgeon general’s guidelines—taxes the liver over time and leads to weight gain because of all those liquid calories, both of which can create medical expenses down the road. So, why not cut back a bit and save some money? Why not drink only on weekends or special occasions? Believe it or not, life sober manages to be pretty all right. When it comes to drinking at bars and restaurants, all we can say is don’t do it. The markup on drinks is astronomical. The cost of two beers at a bar generally will get you a twelve-pack at the grocery store. That’s a no-brainer.
There you have it: three possible leaks in your financial ship. Plug those leaks up and watch as your debt decreases and your bank account set sails on the seas of economic stability.
If you make enough money to afford to invest, you want your investment dollars to provide the largest return possible. Unfortunately, investing fees can eat up a large portion of your earnings. It is important for every investor to be aware of the fees being charged and the amount they pay to hold or sell their investments. A recently launched service called FeeX shows you just how much you are paying in fees for your investment accounts. Minimizing these fees is one of the best ways to maximize your returns without taking on excessive risk.
If you are an active trader, fees on trades can consume a high percentage of your investment earnings. Fees on trading vary widely between brokerages. For a Scottrade or Vanguard account, trading EFTs results in a $7 fee per occurrence. The cost rises to $9.99 for an E-Trade or TD Ameritrade account and can be as high as $14.95 for trades made through Muriel Seibert. In a recent article by GOBankingRates, it was suggested that active traders minimize these fees by trading less often and choosing accounts with low-cost brokerage firms.
Also known as management fees, these fees are basically a convenience charge on mutual funds for being able to invest in a variety of individual investments through the fund. According to calculations from Morningstar, the average expense ratio for open-end mutual funds was 0.71 percent in 2014. Not all mutual funds charge this fee. You can minimize them by choosing investments with low expense ratios or avoid them altogether by focusing on funds that do not charge them.
Brokerage fees are paid to have a third party hold and manage your investments. This investment fee can be avoided by buying your mutual funds directly instead of through a brokerage. This way, your annual fees will only be $10 to $15 per year instead of the $40 to $50 typically charged by a brokerage.
Withdrawal fees, distribution fees, and early distribution fees are monetary penalties for removing your money from an investment. Before opening an account, you should know whether these fees are part of the account agreement. You should also know what actions trigger the fees. If you prefer liquidity in your investment account, seek account options with low or no withdrawal fees.
Investing fees are quite common, but can easily be minimized or avoided by learning the basics of investing and communicating with a qualified financial advisor. Keeping this money in your investments instead of paying it out in fees will make it easier for you reach your investment goals.
The importance of saving for retirement cannot be overstated. Taking advantage of tax deferred retirement accounts is one of the best ways to build wealth and ensures your financial security in the future.
The government has instituted maximum contribution levels for these retirement accounts to keep the accounts from being abused by the wealthy as tax havens. The maximum contribution amounts for 401(k) plan accounts and IRAs, the two most popular ways of saving for retirement, are $18,000 and $5,500 respectively. These limits rise to $24,000 and $6,500 if you are over the age of 50.
Roughly 43 percent of IRA holders contributed the maximum possible amount in 2013. The rest are giving up a considerable tax break by failing to max out retirement accounts. Here are some of the benefits you would be missing out on.
Lower Your Current Taxable Income
Contributions to tax deferred retirement accounts like 401(k) plan accounts are deducted from your paycheck on a pre-tax basis. This lowers your taxable income each paycheck and lowers your overall tax bill for the year. You may even qualify for additional tax deductions if your taxable income drops below a particular threshold.
Lower Tax Bills In Retirement
Saving money in a retirement account allows you to put away tax-deferred funds during your prime earning years when you are in a high tax bracket and withdraw it in your retirement years when you are likely to be in a lower tax bracket. Progressive tax rates also ensure that not every dollar will be taxed at the maximum allowable rate for your income. Using this strategy can save you tens of thousands of dollars in taxes over your lifetime.
Account Earnings Are Not Taxed For Decades
Account earnings for the retirement accounts are not subjected to taxes until they are withdrawn from the account. This allows the earnings to grow tax-free for decades and your account balance to grow faster. The power of compounding earnings is how a person that puts away a few thousand dollars a year in their twenties can have retirement accounts worth more than a million dollars when they reach their retirement years.
Increasing The Chances You Won’t Outlive Your Savings
One of the biggest fears for people contemplating retirement is that they will outlive their savings and spend their last years in poverty. If you max out retirement accounts while you are still in your prime earning years, the chances that you will outlive your savings decreases substantially. You may even have money left over to leave to the next generation, increasing their financial stability as well.