Too much Month at the End of the Money
This week’s educational blog covers two areas, one is about the recent horrible natural disaster known as Hurricane Harvey (and now IRAA), the other while a part of it talks about what happens when there is too much month at the end of the money.
While I will not go into over the top great detail on both and may at a later date what is needed now is an overview and solid understanding of what has happened what can happen and hopefully how to get you to start doing something now to prepare.
In 95 % of the American population this is a typical issue. Studies have shown that almost 80% of families are one paycheck away from considering bankruptcy and that is a scary thought.
With the natural disaster of Hurricane Harvey looming over America’s heads as well as for the victims going through it as we speak and will continue to go through it for at least the next year trying to recover just like from Katrina.
Now is a time to stop and think, how many of those people in Houston and the surrounding cities & most of the State of Florida were paycheck to paycheck? And now throw this into the mix, imagine what they are going though and what future problems they have in front of them, especially with their credit and finances? And for most that is the LEAST of their problems but will soon become the biggest issues.
I remember seeing the results from the hurricane Katrina problems, what did these lenders (car, credit card & mortgage) do to help?
NOTHING of course, they continued to post late payments and all they did to “help” was post in the comments section “Affected by natural disaster”.
It talks about how you “MAY” be able to arrange for deferred payments. MAY?? Really, how about you CAN.
Now to understand what a deferred payment is as many people I have spoken to do not know what it is. It typically applies to finance only NOT leases. Think of deferred payments as skipping a few (depending on what lender tells you) and put it on the back end. But watch out for additional penalties.
BUT…
You typically have to do that immediately and with what’s going on people have more important things to be concerned about. As once your behind then you have to “catch up “in order to qualify for a deferment. But with what’s going on now in 2 major states, eating is a tad more important and seeing if your house is still there.
Now… I could be wrong and lenders may have adjusted the way they handle these natural disaster issues but I doubt it as they are good at paying for commercials stating they care but it’s all about the dollar.
Now the link below from Experian’s site explains how these codes “help” But if you read it it’s just like the credit bureaus to have many loop holes in these “explanations”.
http://www.experian.com/blogs/news/2013/05/24/protect-preserve/
And remember the credit bureaus can only suggest the lender do that as it’s ultimately the lender that has to report it.
SO…
After all this let’s talk about the reality of the world you are living in and its relationship to credit scores, your personal credit file and your funds.
Just recently I have had several high net worth clients hire me and the way out brain works is if you make 400k a year (individually or as a couple) you create a lifestyle that supports that income.
And that’s when we call life for what it is, and you all know the saying about how “things” happen.
Once couple took over 180k from their 401k to pay for credit card debt (within 2 years’ time) and such and while I hope the best for them like I do will all clients my concern is the reality of how they don’t seem concerned with having a budget has hit them yet.
Many reading this most likely do not make that kind of money. And quite possibly live paycheck to paycheck or a little ahead of that number.
When you get tight on money you typically look for a loan to get you by.
NOW, one of the worst things I will say are Payday Loans… BUT I will explain both sides after you read this next part.
Had a client send us the paper work received from lender show a $700 loan with a 640% interest rate!!!
No, I did not mistype that…. State’s do not regulate or cap out the interested allowed by payday loans like they do car loans (24% in TX).
Now how can someone bring themselves to agree to that you ask, typically desperation and not knowing if there may be another way.
No one wants to sit down and create a budget or cut or limit what they can or cannot do, but ask yourself after watching the news… what if that happened to me?
So other than the standard check out other phone companies like metro pcs to cut a possible $150 monthly bill to $100 and start saving that for a year but did you know:
There are things called focus groups where you can get paid anywhere from $50-$125 for your opinion? That’s right; companies if you’re in the demographic they are looking for will pay you.
Try checking out to start www.focusgroup.com to start, there are many other companies like these so you could alone make $200 or more monthly.
Go to google and also put in your local city to see what’s available.
How about doing good and getting paid? Donate blood or plasma monthly and that could pay an extra $50 a month and have ability to possibly save a life?
Now imagine cutting your phone bill down by switching carriers (ONLY IF YOU ARE NOT UNDER CONTRACT), participating in focus groups twice a month and donating lifesaving plasma and do that for one year and put money into a savings account.That could add up to over $3,600 in one year. That’s just one way to save a little extra for a future budget in case disaster strikes.
If you can just start that and then commit for one year you will mentally get yourself to a place where you look at somethings and say I don’t need it but do I want it really or just want it on an impulse.
That’s it for this week’s blog, remember when it comes to credit and your credit score paying bills on time is all it takes but as life happens on in this week’s blog when mother nature happens you need to know the ramifications of what it will do to that perfect credit score.
In the 12 years of doing this and being in the trenches of the credit industry there are so many other things that are linked to your credit when you are trying to get things that without a good credit repair person to help you and guide you are obstacles to make sure you are doing what’s best for YOU!
You would be surprised how what seems logical may not be the best thing for you.
Want to learn more about the credit system? Email me about getting my book as currently having an issue with the website page.
Talk with you all soon!
Wayne
