Using Installment Loans To Get By
With so many loans out there nowadays, how do you know what the right one is for you
? You might just need a short term payday loan. Maybe you need more money for a longer term but don't want to put your car up for collateral. Installment loans are a common loan for just such people.
Installment loans are short-term loans that have proved convenient to a wide variety of qualified customers. The great thing about these types of loans is that they can provide a temporary plug in an overextended budget.
They are easy to apply for, and if you qualify, the money is available in your account quickly, sometimes in as little as two hours. A lot of people are using these loans to find extra cash to gain control over their finances.
The trick is actually using these loans to help you budget instead of hurting it. I recently came across something called the 50-30-20 rule. It is a guideline to carefully portion our your income into three areas - needs, wants and savings.
Needs are kind of obvious and include things such as mortgage, utilities, insurance and child care. These are the things that you can't cut out of your budget. You still should spend some time analyzing these to see if you can find some savings, but overall this should be pretty tight.
Your needs category should take up 50 percent of your income. Your wants are the things that you could potentially cut out of your budget if need be. During this year's recession, this is where most people shaved down drastically to get by. Your wants should make up 30 percent of your overall income.
Finally, savings are what you are stocking away for your future. This should add up to 20 percent of your income, but may have to be more if you're in the older age bracket and haven't reached your financial savings goals yet.
The first thing to do when using the 50/30/20 rule, is to analyze your income. This is going to include everything from your paycheck, alimony and second job income to interest, tips and assistance. Include your spouse's information to get the overall income coming into your household. You can also include any child support or alimony you might receive.
Next, find out what your needs are. This is the tricky part; a lot of people aren't as detailed with as they need to be. The best thing to do is get a notebook and for one month write down every expense that goes out. That includes everything from a morning coffee and a tank of gas, to a new shirt and a gift card.
Once you have your list of everyday purchases, sort them out into either "needs" or "wants." Then, calculate your monthly expenses like rent or mortgage, taxes, insurance, car payments, parking costs, repairs, child care, utilities, groceries, credit card payments, union dues and tuition.
Add these up to find your total needs for the month. The next step is to calculate your wants. During the recession, this is where people used savings, installment loans and family assistance to get by. This includes the things you wrote down in your notebook earlier that fell into the category of "wants."
Things like dining, entertainment, gym memberships, Internet, personal care, lessons, subscriptions, household items and gifts fall into this category. Finally, calculate your total savings per month. In this category you want to include your 401(k), IRA contributions, emergency fund, college savings, extra mortgage payment, and any additional savings.
As the rule states, you should be spending 50 percent on your needs, 30 percent on your wants and 20 percent on your savings. Take a look at how your budget looks and move things around if needed. For example, if you found that your wants are at 50 percent, but your savings are only 10 percent, then you need to alter your spending.
Everything should be in your notebook or spreadsheet so you should be able to find the things in your budget that are misaligned. The installment loans you qualify for can help you get on track with your budget.
by: Jack Landry
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