Financial Planning in Your 20’s
You’ve heard that the 30s are the new 20s, right? Then that makes the 20s the new teens. So you’re even less experienced than you thought. Well, there’s no need to be all-depressed about it, but what you can do is learn some things to help better prepare you for the world of real adulthood. After all, you haven’t quite entered it yet.
Owning a Car
Having a car in your 20s is a definite must, especially if you don’t live in mega-cities like New York or L.A. where public transportation is abundant and reliable. If it’s not for work or school, then it’s for social status. We get it.
There are two major ways to own a car. Both should be considered along with wages and lifestyle spending and habits.
One, buy second hand –there are hundreds if not thousands of used car lots and for sale by owner in the Classified section or in a Trader. The prices vary, but once you buy the car there are no payments. There is room for negotiation with buying second hand, so keep that in mind.
Two, lease to own –this process is much more complicated as paperwork and credit scores are involved, however, if you are a responsible youn’un, this could be the option for you. Beware the car salesman and try to bring someone with you who is either a car expert or a skilled negotiator –don’t go the process alone. As with buying second hand, there is also room for negotiation.
With both options, the car owner will need to have car insurance that covers basic liabilities. And don’t forget gas funds and miscellaneous expenses for tires, oil changes, and any mishaps that might happen.
The truth is, as a 20-something-er, you probably have no credit or perhaps you got a credit card straight out of high school and maxed that baby out. The truth is in getting credit is hard and ruining it is easy.
If you do not have any credit, you should try to get some pronto. How? Try to get a credit card either through your parents or your bank if you have a bank account. Make small purchases and pay them back on a monthly basis on time –again, pay back on time is the primary focus. After a year’s time, you should have built a decent, yet small, line of credit.
If you have ruined your credit from an early age, don’t fret –it can be fixed. Try to talk with the credit card company and ask about payment plans or a one-off payment option. Once you’ve solved part one, it’s on to part two. Make small purchases that you can pay-off easily and punctually. If you fear that having the credit card available to you again will be a source of temptation and lead you to make the same former mistakes, don’t take the risk. It’s best to ask mom and dad if they will open a card in your name with a very small limit, like $100, and after a year or so you will be back in good credit standing.
Using Car as Credit
Maybe you’ve overstepped your bounds by leaps and bounds and are now in serious economic trouble. No financial institution is willing to help you and mom and dad are done with you. Well, if you were a savvy 20-something and did invest in a vehicle, your vehicle can be your saving grace.
If you have 99 problems and money’s one, well you might want to consider using your car to get you out of the mess you’re in. Today, there are many different types of title/registration loans that exists precisely for such reasons –a financial crisis, an emergency, or a money faux paux. And with each circumstance comes the lack of credit history, bad credit history, or the lack of resources to get a standard bank loan. You’re not alone and your problem is fixable.
Title loans don’t check credit history or at least your credit history will not be used against you. The loan is based on the value of the vehicle. Case in point, don’t have high expectations on the value of your vehicle –be realistic about the potential loan amount.
By using your car as venture, as in a pawnshop-like situation, you can get money for whatever money hole you’ve found yourself in. Simply hand over the car title or show car payment receipts on an almost paid-off car and you can have money in your pocket in as little as 24 hours.
For those worried about the pawnshop comparison, there is one major difference with title loans. You will not have to let go of your car, you keep your car in order to pay back the loan. Title loan lenders know that for most people, their car is their prized possession and their only means of transportation. Taking that away would really be like removing a lifeline. Lenders are not trying to do that –they’re trying to help you.
Each online title loan is a little different, it’s your responsibility to ask questions and do research prior to signing anything or selecting a payment plan. A wise borrower knows what he/she is getting into and doesn’t just blindly sign documents hoping to escape from one problem.
Payment plans come in a variety of shapes and sizes and there is definitely one that will suit you. But remember, your payment plan should be compatible with your lifestyle and your bill cycle. Take your time and evaluate your money situation because it matters.
Benefits of Title Loans
Teach Responsibility: You will learn that making mistakes have consequences and you must be mature enough to handle your business.
Value Money/Saving: You will learn that money does not, indeed, grow on trees. And you will be more careful with your spending and saving habits.
Be Independent: You will learn that being an adult means managing your life with a little bit more sense and less chaos; this will be the balance you seek.