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Each one of us faces the tough task of making decisions in terms of our day-to-day finances. In fact, such decisions can spell either the success or failure of our money-management strategies, which can in turn affect our personal or household budgets.
That’s why today, we have decided to discuss with you several factors that you need to keep an eye on to improve our overall chances of making the right financial decisions, each day.
Credit Card Debt and Retirement or 401(k) Fund
If it’s not possible for you to pay both at the same time, it only makes sense that you first concentrate on paying off your credit card debt. Most credit cards impose high interest rates and finance charges so the sooner you can complete your payments, the safer you will be against bad debt.
Does this mean you should ignore your retirement fund? Not at all! The moment you are free from credit card debt, see to it that you will set aside enough portion of your monthly income to contribute to your 401(k) fund.
In fact, it is recommended that you start contributing to your retirement fund as soon as you get employed or you have an income. Take advantage of the opportunity to get as much as 50% more from your retirement as your employer matches your contributions.
[GOOD READ:Late Retirement Plans]
Personal Car – To Lease OR Buy?
Applying for a car loan may not be that easy especially if you have below average credit rating. Since the best deals are often reserved to customers with good or excellent credit, you may have a hard time qualifying for a low rate loan if you have less-than-perfect credit.
In overview, buying a car will cost you less over the long term. Nonetheless, leasing gives you the chance to drive a car without having to take out a loan, in exchange for monthly lease payments. If you can find a leasing company that offers a reasonable deal, then leasing can be a practical choice.
It’s also worth noting that vehicles diminish their value as they get used and worn out. After a few years, you may not be able to resell the car you purchased at a good market price. On the other hand, if you leased, you can have the option to either return the car or buy out at a low price.
[GOOD READ:Bad And Good Points Of Car Leasing]
Mortgage Loan – Pay Early or Invest
If you’ve taken out a loan, should you complete your mortgage payments early or should you invest the money in stocks or bonds?
Paying off your mortgage enables you to save money from the interest rate of the loan. If you can afford to pay off your mortgage 20 or 10 years earlier, obviously, you will gain a significant amount of savings by not paying the interest rate. It will also give you peace of mind that you’re done with your loan payments and the risk of foreclosure is completely eliminated.
How about if you invest the money by buying stocks and bonds? If you have 10 or 20 years left, you are more likely to earn more by investing your money than by paying off your mortgage. You should definitely consider the repayment period left as well as the stability of your present financial situation.
[GOOD READ:Predatory Mortgage Lending Abusive Practices]
Home – To Buy OR To Rent
Buying your own home wins you more savings if you plan to stay in the same house for at least 10 years or longer. A home is a great investment because it does increase in value over time, especially if you are in good location.
There are other advantages of being a home-owner such as not worrying about the possibility of being forced to move by your landlord, the freedom to renovate your house or design it as you want, and you strengthen your credit history as you keep up with your mortgage payments.
On the other hand, renting a house may involve much less monthly fees and can be a more practical option if you plan to move to another State or region some time soon. When you rent, you don’t have to worry about maintenance costs as up-keeping is usually the responsibility of the landlord.
[STEPS :Renting An Apartment Despite Bad Credit ]
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