10 Things You Need to Learn About Money Before Taking Out a Title Loan
August 27, 2020 | Daniel Dewitt
Title loans are an incredibly valuable financial tool, but they’re not one to be taken lightly. They’re convenient, fast loans, but like all title loans, they have to be carefully considered, with their pros and cons examined and gamed out. It’s important to have a strong idea of where your finances lie before taking out fast loans like them.
Additionally, there are also quite a few steps you can take before obtaining a title loan. Today we’re here to explore both things: the things you should know about money, and the steps you can take to execute them in your life and become a pro with title loans.
Money Slips Away Faster Than You Think
As humans, we’re not always the best at understanding or comprehending large systems. Studies show that at most we can only keep about seven things in our head at any given time, which means that inevitably when it comes to something as complicated as your finances expenses are going to slip through the cracks. This is why you always seem to have less money than you think you should.
Start Saving for Retirement Now
While it may seem far away, if you don’t start saving for your retirement now, then it’ll be too late all too soon. The key to a successful and effective retirement fund is to let it slowly grow over time so it can be harvested in your old age. But that process requires time to mature and the later in life you start it the less effective it will be. Just a little each month starting when you’re young can save you a massive headache later in life.
Learn to Budget
Budgeting is a concept that many people instinctively shrink away from for the simple reason that it sounds complicated and has to do with math. And while that’s fair, budgets don’t have to be complicated equations. The easiest way to create an effective one to make your life easier and not harder is to use a budgeting app like Mint that will automatically organize and categorize your spending.
Little Expenses Add Up to Big Costs
One of the most important lessons about money you can learn is simple: persistent small expenses add up over time to take a big chunk out of your paycheck each month. One of the best ways to illustrate this concept is with coffee: there are 365 days in a year, and if you spend $3 a day on a cup of coffee that’s a thousand dollars a year solely on coffee.
Don’t Let Savings Sit
Connected to the point above about retirement, letting money sit around not doing anything in your bank account is a good way of losing it because of the simple fact that inflation will slowly reduce it’s value. Instead, put it towards your retirement, a specific thing you’re saving for, or an emergency fund.
Create an Emergency Fund
The idea behind an emergency fund is simple: it’s a savings account specifically reserved for those times when life decides to sucker punch you. Each month you allocate a little of your income towards it so that when you need it, it’s there for you to use without having to go into debt.
Try to Reduce Your Taxes
The saying goes that only death and taxes are unavoidable, and while that’s true, that doesn’t mean you can’t abrogate the damage wreaked on your finances each year by taxes. The best way to reduce your taxes is by either stuffing it away in retirement funds, or by deducting as many business expenses as possible. This can seem difficult, but is ultimately rewarding.
Sell What You Don’t Need
We all have a habit of hanging on to our possessions longer than we should. Life is busy, and making an effort to go through and get rid of anything that doesn’t spark joy is a time sink that can take hours if not days. But one thing people don’t realize is how much value is often simply parked around our houses in things we don’t really want or lose. We talk about how downsizing your can upisize your savings in a previous blog. Books, furniture, collectibles, electronics: all can be sold both to clear space and earn you a little extra cash. Doing so regularly can add up to a lot over time.
Know the Up and Down of Interest Rates
Loans can be fantastically useful, but you should always know beforehand what the interest rate is. Often the best way of earning money, is simply to reduce your debt and the interest rate you’re paying on it. Interest rates on credit cards can drastically increase the price tag on even minor items if they’re bought with one. It’s an unorthodox way of looking at them, but one that in the long term will pay you back in dividends.
Know What You Don’t Know
This is the last, and key step to what you need to know about money. Knowledge is an endless font, and it’s impossible to learn everything. But if you have an awareness of those things you don’t know, then you know where and what to research when you stumble into a new situation or event. And that, is key to a successful financial existence.