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Would you buy a new car?

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I did.  In 2007 I bought a new car and swore it was the biggest financial mistake I ever made.  I sold it three years later and now five years after that BF and I are thinking of getting another new car.  So here’s my question, do you have a car and if so did you buy it new or used?

There are several advantages of buying a new car such as the warranty on parts and service as well as the peace of mind that comes with something new – and of course there’s the new car smell.  I will never forget the day I picked up my car from the dealership and sat in it for the first time.  I was 27 years old and felt like a true adult for the first time in my life.

Buying a new car is a big girl purchase

Buying a new car was the biggest purchase I’ve ever made and I was more than happy to parade it around in front of my family and friends whenever I could.  My parents didn’t really seem to care too much, but to me buying a car was a really big deal.

A new car comes with new financial obligations that I definitely wasn’t ready for.  The car payment alone was $500, then I was paying $125 in parking, $50 every two weeks in gas and $100 a month for car insurance. Overnight BF and I suddenly had a newfound $775 in monthly expenses that we definitely couldn’t afford.

A new car costs a lot of money

I would love to tell you that it was all worth it because our brand new Honda Civic was just that awesome, but unfortunately the cost wasn’t worth the benefit for us.  Since we lived in the city and both worked less than 30 minutes away on foot we always walked to work.  Of course it would be easier to drive, but I refused to pay $125 for parking in our apartment building and another $250 per month for parking at the office.

We really only used the car on weekends to run errands, get groceries and for weekend road trips.  We sold it three years later with less than 30,000 kilometers on it.  I was sad to see it go, but I love saving the extra money every month.

The case for buying a used car

A lot of people who have bought both new and used cars say that they will never buy used again.  For some people the inflated cost just isn’t worth it.  I like the idea of having something new, but then again having something that’s only a couple years old and saving thousands of dollars is O.K. too.

It took a long time for our Honda to become fuel efficient.  The dealership says that this usually only happens after 10,000 kilometers.  It took us over a year to reach that point on the speedometer and until that point it seemed like our car was drinking gas.  Now remember this was back in 2008-2009 when gas prices were very high.  Buying a used car means this is already worked out.

So what would you do?  Buy a new or used car? Photo from Pixabay

How to Maintain Good Credit

Maintain Good CreditThis post is a contributed post from USA.gov.  See their Financial Self-Defense Kit for advice on how to build financial confidence as well as safeguard your finances.

“It takes many good deeds to build a good reputation, and only one bad one to lose it.”

— Benjamin Franklin

Your credit history is your financial reputation. And just like your professional and personal reputations, your credit history takes many years to cultivate, can be easily damaged, and will follow you for the rest of your life.

Sound intimidating? Good. Are you scared? Don’t be.

Yes, maintaining good credit is important. Nearly everyone will need to borrow money from a lender at some point — say, for buying a car — and your credit history determines whether you qualify for a loan and, if you do, what interest rate you pay. It can make or break your application for a credit card. A prospective landlord can check it to judge whether you’ll be a responsible tenant. Potential employers may request your credit reports to see if there are any red flags.

Luckily, many resources are available to help you learn how to successfully establish — and maintain — a healthy financial reputation. Here are three tips for creating a stable foundation for good credit:

Monitor your credit reports

Understanding your financial habits — such as payment history and spending patterns — can help you improve them! Your credit score is generally based on information in your credit reports. Mistakes on your credit reports could hurt your credit score, so check them regularly. Make sure to check that your reports don’t contain any errors, such as incorrect contact information, closed accounts listed as open, or an item like an unpaid debt listed twice.

If you find something wrong in a credit report, you should contact both the credit reporting agency that produced it and the creditor that provided the information.

Pay your bills on time

This is one of the simplest ways to keep your credit score strong — yet, with the hustle and bustle of everyday life, it can be easy to lose track of time and miss payment deadlines. Set up auto-payments or electronic reminders to ensure that you won’t be hit with late-payment penalties. Paying bills late can also hurt your credit score, which in turn can raise your interest rate — meaning that you’re out even more money.

It’s a common misconception that the best way to improve a credit score is to pay off all of your accounts and close them. Get up to speed on your payments and stay on schedule, but be careful when closing accounts. Doing so eliminates some of the credit available to you, making balances appear higher when compared with the combined credit limit of all of your accounts. Also, if you managed that account well and made payments on time, closing it will remove all the positive benefits of your responsible credit behavior on your report and score.

Don’t get close to your credit limit

Credit scoring models look at how close you are to being “maxed out,” so keep your balances low in proportion to your overall credit. Experts advise keeping your use of credit at no more than 30 percent of your total credit limit. That means that if you have $12,000 of available credit, you shouldn’t use more than $3,600.

You can decrease your credit utilization ratio over time by paying as much of your credit card balance as possible each month. If you can, pay more than the minimum balance due; this will increase your available credit and decrease your utilization ratio faster.

Just as a shining professional reputation can take you far in your career, your credit score can make or break your financial status. To learn more about how to establish a stellar financial reputation, visit FinancialProtection.USA.gov.

 

Borrowing Made Easy

If yourely on a minimum wage job or a short-term contract, it’s easy to find yourself short on funds through no fault of your own. When you’re only making enough to cover the cost of your immediate living expenses, it can be difficult to save up enough money to cover those unexpected costs. If you’re one of the many Americans living without a safety net, don’t fret. Direct online lenders are there for you, offering small dollar loans when you need money the most.

borrowing made easy

Direct online lenders have created a streamlined lending process so that you can get the loan you need and pay your bills fast. Direct online lenders will be the only company that has access to your application. As they not only asses and approve your loan application, they also facilitate the actual approved loan amount. This makes their online process much faster than other lenders, as you’ll never have to wait while two different companies communicate. In as little as 20 minutes, you can be approved for your loan.

By limiting their loans to small amounts (typically between $200 and $500), direct online lenders can foster a positive lending relationship with their borrowers. These small sums are perfect for when you need a little extra help paying for unanticipated medical bills or car repairs, and they’re small enough that they can be easily paid back without creating irresponsible money habits.

That’s because a direct online lender that you can trust with your financial future is one that genuinely wants to promote responsible lending policies. You should only ever apply to a lender that outlines their terms and rates clearly and that provides helpful advice should you have any questions regarding your loan. As well, their terms and rates should be in accordance with state rules and regulations in order to ensurethe fees, interest rates, and conditions involved in your loan are manageable.

MoneyKey is one of these online lenders. They clearly state their terms and rates for each of their loans to prevent misunderstandings regarding their fees and repayment process. As a reputable online lender, MoneyKey offers a variety of loans, so you’re never forced into a term that you can’t afford. The finance options from MoneyKey include single-pay loans that are to be paid back in one lump sum within a specified time; they also have flex-pay installment loans with a longer payback period for those who can’t repay their loan at one time.

With different loan terms available, you can be matched with the cash that you need without creating financial burdens in the long run. You can carry on living with your short-term contracts or minimum wage job without the worry of not being able to pay your bills.

Getting the Best Currency Exchange Deal

money-79657_1280Changing money is something that most people do not do every day, but it is something most of us do at some point in our lives. Increasingly people are buying properties abroad, sending money to family members who have moved or who are studying overseas, so I thought a quick piece about how to get the best currency exchange deal would be of use to many of you.

Things have changed

While researching this piece I looked at several options and was pleasantly surprised to find that because of p2p currency exchange services the cost of changing money has fallen. It is now possible for private individuals to get rates that are very close to those offered by businesses and provided you use the right firm the fees are far lower than they used to be.

However, as with all things in life it is important to do your research and shop around for the best deal. The more money you are sending abroad the more important it is to do this. If you are sending money abroad on a monthly basis paying more than you need to in fees or getting a poor exchange rate can end up costing you hundreds.

The approach laid out below should stop this from happening.

Choose a trustworthy firm

The first step is to draw up a list of firms that you can trust. When you find a potential candidate pop along to their fees page and get an idea of what they charge. If it looks like a good deal (see below for more advice about this) check to see that they are registered with the authorities.

Which regulating authority money exchange firms should be registered with varies from country to country. The important thing is to find the firms registration details, note then down, and go to the regulators website and make sure that the firm really is registered with them.

Understand the fees

You need to find a firm that offers a good service and charges a fair price. To do this you need to understand the following fees and costs:

The exchange rate – this is perhaps the most important variable to understand. What the exchange rate is makes a huge difference to how much money is sent to the foreign account.

Account set up fees – some firms charge you to set up an account with them. Unless they offer exceptionally low fees and a great exchange rate, it is rarely worth paying a fee to set up an account.

Bank charges – you should also check how much your bank and the recipient’s bank will charge per transaction. This is not something the currency firm has any control over, but it is important to factor this cost in.

Transaction fees – most firms charge some sort of transaction fee. How much varies greatly from firm to firm.

 

Other charges – always ask for a quote and double check that there are no hidden fees.

 

By following these tips, you can relax knowing that you will get the best currency exchange deal, and will be able to spend the money you save on something nice.