Banks / Personal Loans
Question: One of my relatives is having serious health problems. They keep asking me for money, but I’m unsure how to handle the situation. How can I help without endangering my own financial position?
Answer: I suggest letting the relative(s) live with you. I’m not in favor of actually handing over cash. By letting them live with you, you’re already saving them at least a thousand dollars a month. That’s plenty of generosity. If you start doling out checks on a regular basis, then you have committed yourself to that for the rest of their lives. Once someone gets a cash flow from you, it is almost impossible to cut it off. It’s the same concept that applies to public taxes. Once the public gets accustomed to paying a higher tax, that tax never gets lowered or goes away, because the entity receiving the benefit will always be pressuring for it.
Question: Making the most of my budget has always been a challenge. Planning out my weekly expenditures has been tough for me, since life continues to change and my needs next month might be much different than this month. What can I do to keep things organized?
Answer: First, try using a Microsoft Excel spreadsheet to track basic credits and debits. Keep everything organized by pay period, and make sure that your expenses don’t overwhelm your income. Try forecasting your needs for the next quarter, or year. Make sure that you run a surplus for whatever period you’re forecasting. You can also use this document to keep track of your investment accounts and any other financial obligations. Once you have mastered Excel, then you’re ready to move onto a more sophisticated tool like Microsoft Money, which will produce automated reports and help you do in-depth analysis.
Question: While working on an independent business, I fell behind on some of my normal financial obligations. What’s the best way to make inroads toward becoming financially sound again?
Answer: If an independent business is going to put your normal finances into jeopardy, you should not be doing the business in the first place. People that start businesses in a responsible fashion make sure that they do it conservatively. To recover from a significant hardship, take the normal steps of reducing your living expenses, downgrading your automobile, and ending the use of credit.
Question: I’m a financially successful person, and because of that I constantly have relatives and friends asking to borrow money. What’s the best way to deal with these awkward situations?
Answer: There’s nothing wrong with lending money directly to friends and family, but do it through the proper channels. Have them register as borrowers on www.Prosper.com, and then lend them as much money as you want. That way you are both protected due to the safety mechanisms built into the site. Plus, the site will track the entire transaction and monitor any interest payments if need be.
Question: Where is the best place to have a checking or savings account?
Answer: In today’s world there are so many options, every consumer can pick between thousands of institutions because of the Internet. Every account offers a large number of different incentives. While there are a large number of banks fighting over your business, credit unions and online brokerages also come into the mix. The best thing to do is look at the wide array of choices at www.bankrate.com, www.eloan.com, www.lendingtree.com, and www.creditcards.com. Survey the different scenarios and decide what is right for you. Also keep in mind that if you are a veteran, or the offspring of a veteran, www.usaa.com offers some of the best deals and service.
Question: I really have trouble working my way through financial challenges. How can I improve?
Answer: Check out www.FeedThePig.org. It’s a website set up by the federal government that helps people understand the basics of finance. If you sign up for their daily email you’ll receive important advice every day. They really understand what it takes to be successful with everyday challenges like budgeting and investing.
Question: Should I use a bank or credit union?
Answer: The bank is owned by investors. The credit union is owned by the members that use it. A credit union is cheaper and will provide better interest rates 99% of the time.
