How to Budget for the big things, use what I call Big Thing Budgeting.
USE BIG THING BUDGETING TO GET OUT OF A MOUNTAIN DEBT: CREDIT CARDS, MEDICAL BILLS, PREDATORY LENDING
For Individuals, Couples and Small Businesses, you can get out of a mountain of debt if you focus like a laser beam on getting debt-free. It is not easy, but it is possible.
It will first require that you stop buying anything you don’t need. Get rid of the “I Got to Have it Syndrome”.
Start by keeping a log and inventory of your buying habits. Then slowly start to purge spending you don’t need to do. When you take an inventory of your buying habits, you will be surprised at the amount of unnecessary buying you do.
Second, you must start paying off one thing at a time in a big way but pay on other bills at the same time. Start with the smaller bills, pay extra to those bills with the most you can afford, then pay a small amount extra to principle to your other bills — at the same time. You will see bills drop off one by one. Now, for the larger bills, you may have to start selling things you don’t need. From cars to yard sells, is where you can sell things you don’t need.
BUDGET TO BUY A CAR
Save money for your next car while your current car is in good shape. Then, research the cost of the car you are interested in. Set a budget, then go through the internet and your local newspaper to see prices and figure out monthly payments, if you plan to finance. If you don’t plan to finance, you will see how much you need to save and for how long, to pay cash.
Consider buying a certified used car at a new car dealer or a one-year-old car from a new car rental agency. Make sure you know the new car prices and options on a new car so you can compare it to a new-used car with options. Use Kelly blue book or kbb.com, to check for cars that are good for buying as used cars. You can also check for general pricing of new and used cars.
BUDGET TO BUY A HOME
Home buying requires doing a lot of research to discover 1. how much you can afford to pay for a home, 2. how to find a good mortgage company, bank, or credit union. The best place to start is your local credit union or bank due to the savings in fees, cost and time. 3. How to buy a quality home, and 4. How to get it properly inspected – some inspectors work for the realtors, so many won’t tell you when you the home you are interested in has major problems. Therefore, it is best to contact tradesmen directly, like electricians, plumbers, roofers, and carpenters to get a fair assessment of possible home repairs. Most of them will do an inspection in their specific area for a small fee. Use at least 2 of each kind, so you can get a consensus as to what is wrong. You can then budget for the down payment and escrow cost to purchase your next home.
Therefore, it is best to contact tradesmen directly, like electricians, plumbers, roofers, and carpenters to get a fair assessment of possible home repairs. Most of them will do an inspection in their specific area for a small fee. Use at least 2 of each kind, so you can get a consensus as to what is wrong. You can then budget for the down payment and escrow cost to purchase your next home.
Make sure you know exactly what your payment will be in regards to your loan. What will your payment be with Principle+Interest+Insurance+Taxes? You can also do mockups of an imaginary home to calculate what you should pay. Ask friends or family what they pay for insurance and taxes for a home you are interested in. Taxes vary from state to state, you can also search your state websites. In some states, taxes go up as home values increase, but in others, the taxes stay the same.
BUDGET FOR VACATION
Don’t put your vacation on a credit card when you can save a little all year and pay cash for your vacation. It is as simple as that. Budget in transportation, food, lodging, tours, and shopping. If you want to go on the cheap, vacation where you have family members or friends who live in or nearby vacation spot. Pay your family member to stay with them, or cover their restaurant costs and meals. Do the math, and see what works out.
BUDGET FOR COLLEGE
Some people are obsessed with the “best college syndrome” due to the college propaganda machine.
If you have unlimited money, you can go where you want. But, if you must depend on financial aid, which usually includes substantial student loans, that is not an option. If there is one thing you want to keep as low as possible, is student loans. Since there is 1. never a guarantee you will get a job in your field or keep it, 2. There is not a guarantee you will get a job that pays in accordance with your student loan 3. you can’t file bankruptcy on student loans.
Because of these items 1-3, you should keep student loans as low as humanly possible. That means avoiding high priced schools and high-priced areas to live in for college. The least expensive schools are community colleges, and state colleges and universities. There are some colleges that are priced like state colleges and universities, but you must do your homework and compare all cost. Private colleges and universities are unreasonably high cost and they have a lot of hidden costs, which makes the total difficult to calculate. The for-profit schools offer quick learning and high prices. Today, some of them are now calling themselves non-profit due to the unpopularity of the for-profit model.
Private colleges and universities are unreasonably high cost and they have a lot of hidden costs, which makes the total difficult to calculate. The for-profit schools offer quick learning and high prices. Today, some of them are now calling themselves non-profit due to the unpopularity of the for-profit model.
The for-profit schools do massive advertising on television and the internet, this is your main clue. All colleges and universities have their cost listed on their websites. Make sure you find these costs and know exactly what you are getting into before you consider any college. Your total student loan balance should not surpass your first years’ salary. Example: If you plan to be a teacher and your first year’s income is $25,000, your student loan should be capped at $20,000. Understand the details of student loans with the eBook on student loans.
BUDGET TO PAY OFF STUDENT LOANS
There ae people all over Pinterest bragging that they paid off $60,000 of student loans in 5 years. This is possible due to re-amortization. When a loan is amortized to 20 years by your loan servicer, you can amortize it to 10 years by paying extra to principle every month. If you have a 10-year loan, you can knock it down to 5 years. You can live tight, give up the finer things in life, and knock down those years with extra payment to principle. You have to check your statements to make sure the extra payment is added to principle and you have to state that on your check, they will always try to put the extra to interest, even though it makes no sense. Big Thing Budgeting is essential when it comes to student loans, if not done correctly, these loans can follow you to your grave.
You have to check your statements to make sure the extra payment is added to principle and you have to state that on your check, they will always try to put the extra to interest, even though it makes no sense. Big Thing Budgeting is essential when it comes to student loans, if not done correctly, these loans can follow you to your grave.
Understand the way predatory lending works such as car title loans and payday loans. Why are many cars confiscated with a car title loan? Why do payday loan balances go from $500 To $3500? I would have to write another article for an explanation, but a car title loan can easily double or triple if the money isn’t paid on the date due repeatedly, and a payday loan gets a rollover when the employee does not have the money to repay the loan on time. Both problems push the balance way up over the top. The most effective way to pay off these loans is to stay away from predatory loans. Using predatory lending is probably the direct opposite of using Big Thing Budgeting, don’t get caught in the predatory lending trap. Predatory lending also includes car title loans, unsubsidized student loans and high interest car loans.
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Lois Center-Shabazz | Course Delta Agency
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