Unexpected Financial Setbacks

Many of us operate on some sort of budget, or at least try to do so. The amount of effort varies tremendously from household to household. One survey found that 82 percent of Americans said they budget, but about a third of those just write it out on paper. Roughly 20 percent of people use mental accounting, and don’t write down anything at all. It’s better than nothing, but it’s still not as good as it could be. Budgeting as precisely as possible makes it more likely that you can handle a sudden financial emergency. However, wages remaining stagnant makes it harder for many people to have much of a rainy-day fund. The combination of factors means that we have to look elsewhere when we suddenly need $500, $1,000, or more. How-to-handle-unexpected-financial-setbacks

Medical expenses

A sudden medical incident can be incredibly frightening. No one wants to get into a car accident, or have an asthma attack so severe that it requires us to call an ambulance. When we’re in the middle of a medical emergency, we have to worry about treatment first and payment later. Sometimes, the payment is much more than expected, especially if insurance won’t cover the full amount, or if the medical office coded a procedure incorrectly. It stinks to think about all this when you’re in pain; however, you can always go to an emergency room if there’s no other option. Heart attacks, strokes, and major accidents all require major and immediate medical intervention. If your life is in danger, or you even think it might be, head to a hospital.

What if you sprain an ankle or develop a case of the flu? In that case, you have a bit more time, and a few more options. Head to an immediate care center, similar to the one in Staten Island, New York, rather than to a hospital emergency room. They’ll be able to examine you and give you the treatment you need, at a better price than you’d get at a hospital. Those emergency room co-payments are nothing minor, unfortunately, so it’s best to avoid them, unless you have no other option.

It’s possible that you could go to a walk-in clinic, and be told that your issue is something that requires you to go to an ER, anyway. In that case, at least you can say you tried. If all else fails, ask about paying in installments. Most hospitals and doctor’s offices offer interest-free payment plans, if you ask them.

Loans and credit
Credit cards and loans are sometimes necessary. However, they should be used as judiciously as possible. They’re a good option for building up credit, since a good credit score helps you buy things like houses and cars. However, what if you have an unexpected, one-time expense and bad credit? Cases like that are tough, because you don’t have years to build up a good credit score. You need a way to pay off a balance within the next few days, or, if you’re lucky, the next few weeks. Do some research on bad credit loans, and see if they make sense for your situation. Make sure to read the terms and conditions very carefully, so you don’t get any unpleasant surprises when you repay the loan. It’s vital to know exactly what you’re getting into, before you sign on the dotted line. A short-term loan is only useful if it doesn’t turn into a long-term problem.
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3 Benefits of Cosigning Your Kid’s Loan

Is your child going to need a loan in the near future?

Maybe it’s a student loan to attend college or a mortgage to purchase a home. They may just need a small loan to buy a car.

Whatever the case, you should consider cosigning that loan for them. 3 Benefits of Cosigning Your Kid's Loan

3 Reasons to Cosign Your Kid’s Loan

Being a cosigner is definitely a big responsibility, but there are at least three very good reasons to consider being one for your kid.

1. Teaching Them the Process

There is absolutely no shortage of lenders these days, so even a millennial like your child should have no problem finding someone who will give them the loan they need.

The problem is that if your kid doesn’t know what they’re doing, they could walk away with the money they wanted but also an unfavorable rate they know nothing about.

While it’s always best to understand how lending works before so much as even applying for a loan, there’s no law that this is a requirement for accepting one.

That’s why it’s often a good idea to cosign your kid’s first loan. By default, this makes you an integral part of the process. You can go over every step of it with them to ensure they understand what it is they’re signing their name to.

While your signature will help them achieve a more favorable rate, your involvement may be the only reason they don’t accept an extremely unfavorable one.

2. Giving Them a Better Rate

The main benefit of having a cosigner is to earn a better rate on a loan.

This is always helpful, of course, but it can make all the difference for your kid. As a millennial, they may not have very good credit or no credit to speak of at all. So without your signature, they will receive a very unfavorable rate.

Many lenders won’t even offer a loan to people who don’t have an established record of good credit.

3. Helping Them with Their Education

Taking out a student loan has become just as much a part of going to college as choosing a major, signing up for classes, and buying books.

Nonetheless, that certainly doesn’t make them any more affordable. In fact, going to college is becoming more expensive every year.

Of course, federal loans – the most popular option – don’t always cover all the costs involved. If your child plans on going to medical school or has some other dream that requires more funding, they may need private loans to cover the difference.

So it should come as no surprise if your kid asks you to cosign on the loan – or, realistically, loans – they need to go to school.

These can be more expensive still, making it all the more important that they have a cosigner.

Talk to Your Kid About Cosigning

Make sure you talk to your kid about acting as their cosigner long before they begin considering a loan. The last thing you want is for them to secure unfavorable terms simply because they didn’t know how much you could help.

With one simple conversation, you can enjoy the three benefits of cosigning a loan for your kid that we just discussed above.


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