Ways to Manage Financial Emergencies Without Going Into Debt

It only takes one unforeseen circumstance to throw your finances out of whack. Your car breaks down, a pipe bursts, the landlord raises the rent, you lose your job, you get sick or injured, and everything seems to fall apart. Overwhelmed with emotions and limited time to devise a plan, you make a decision that temporarily solves the problem, but creates issues down the road. You take out a loan or charge your credit card and then spend the next few months trying to figure out how you’ll survive.

Chances are you’ve been here at least once in your life. Though it may seem like the best thing to do when faced with a financial emergency is to borrow the money, there are other solutions. Continue reading to learn more.

Look for Financial Assistance

There are programs out there designed to help people when they’re in a financial jam. Let’s say you were in a car accident and suffered long-term injuries. A quick search of social security office locations near me and an application for disability benefits can turn things around. You’ll have the funds you need to tide you over until you’re able to get back on your feet or find another income source. The best part is, you don’t have to repay these funds, so there’s no debt to worry about. Before you assume there’s no way out of your circumstances, do some research on financial assistance opportunities.

Crunch Some Numbers

It may appear that you don’t have the income necessary to cover the emergency on the surface. However, with a bit more digging, most find this to be quite the opposite. If you were to ditch your cable services, downgrade your cell phone bill, stop buying coffee every day, and find more affordable ways to entertain yourself, you likely have the cash you need to pay for the unexpected expense. Before turning elsewhere to resolve your problems, get serious about your spending to see if you can handle it yourself.

Sell Some Things

As the saying goes, one person’s trash is another person’s treasure. Chances are you have things in your possession that you no longer use that could prove valuable to someone else. Whether it’s some old clothes and shoes, an outdated cell phone, jewelry, or a disabled vehicle, there are opportunities to earn some much-needed cash. You can find a specialized buyer, post and sell these items online, or have a yard sale. The sales proceeds could then be used to cover all or a portion of your emergency costs.

Turn to Friends and Family

Your friends and family are other sources you can turn to in your time of need. While they too may be strapped for cash, there are other ways they can help you out of a jam. For example, your sister may know a mechanic that’s willing to repair your car for a low rate. Your best friend’s husband could be an HVAC contractor that’s willing to repair your air conditioner and allow you to repay them in affordable monthly installments.

Earn Some Cash

When faced with long-term emergencies like the loss of a loved one or job, there’s also the option to earn more money. It doesn’t have to be as involved as filling out applications, going to countless interviews, and working another full or part-time job. There are plenty of ways to earn money relatively quickly. You can cut someone’s grass, walk the neighbor’s dogs, offer to babysit, housesit for a relative that’s going out of town, sign up for a rideshare service, deliver groceries or food, and so much more. Many of these options will pay you cash daily to handle your emergency without skipping a beat.

Taking out a personal loan, borrowing on your retirement savings, or charging your credit card are the most common solutions for getting out of financial trouble. While these options can resolve the immediate problem, it can take you months or even years to repay. The most efficient way to tackle a financial emergency is to exhaust the options listed above first.

Things to Consider When You’re Opening a Car Dealership

From whether it’s okay to have two car loans at once to ways to compete with your competitors, there’s much to be considered when you’re opening a car dealership. The first thing to consider is if opening and running a car dealership is a viable option for you.

If you have sales experience or a sales manager that does, and a good business head on your shoulders, then it may be a great idea and quite lucrative as well. However, there are a few things to consider and questions you should ask yourself before you make the decision to open your car dealership. A few of those things are listed below for your perusal.

Do Your Research Carefully

The last thing you want to do is jump into the car dealership business without first doing the proper research. The research includes things like whether you need a surety bond for your business, what the best location is to put your business and even taking a few classes to help with marketing and business. The more research you do, the better prepared you’ll be when you finally open your doors.

Your Customer Base

Your target audience is going to be your local community. This consists of family, friends, and sales referrals, especially in the beginning. Is your dealership going to be located in a working-class neighborhood or a more affluent part of town? Who lives in this area? Baby boomers? Retired couples? College students? Knowing these things helps you with what type of cars to carry and what price points to set, as baby boomers can certainly afford a more expensive car than a struggling college student.

Type of Dealership

If you’ve done your research, then you already know that you need to decide on the type of dealership you want to open. Decide whether you want to deal with new cars, used cars, or a mixture of both. You could also focus on luxury cars, foreign cars, or even just electric cars. This will be decided during your research of your customer base, by figuring out what sells the best and what the people of your community are looking for the most.

Your Business and Financial Plan

Never open a business or sink your money into opening a car dealership without drawing up a solid business and financial plan first. If you’ve never developed one of these plans before, it might be best to consult a professional, so it’s done the right way, the first time. This car dealership is your future, so you don’t want to leave anything to chance.

Research Licensing Requirements

To open a car dealership in any state, you’re going to need to have a business license and follow the rules and regulations of that particular state. Each state is different, so make sure to research the licensing requirements in the state you’re opening the dealership in. Some states have few requirements and light fees, while others have heavy fees and stringent requirements for licensing.

Research Legal Provisions and Requirements

Once you open your dealership, you’re going to be required to adhere to federal and state legal provisions and laws. From surety bonds to insurance and laws that differ from state to state, you need to research them all, and if you don’t understand something, ask for help.

These are just a few things to consider when you’re thinking of opening your own car dealership. Considering the things above will help you open your dealership and help you make your business the success you’ve always wanted it to be.

Can You Have Two Car Loans At Once?

, can you have two car loans at once

When purchasing a car, the process is somewhat daunting. Although for the most part, it’s fairly simple. That is, as long as you have decent credit. First, you find a vehicle that suits you and your monthly budget. Then, after settling on a price and putting some money down and/or trading in another vehicle, you’ll sign off on a loan. This will likely be at the dealer’s. Then you’ll drive your new-to-you car right off the lot.  But, what if you’re buying two cars at once? How about if you’re buying another care before your other vehicle loan is paid off? Can you have two car loans at once?

Can You Have Two Car Loans at Once?

You may find yourself in a situation, particularly with your husband or wife, where you may need to have two car loans out at the same time. Whatever the circumstances, the answer is typical of most finance questions: it depends.

As with any loan, what will determine your approval comes down to a number of factors; mainly, your credit. Let’s break them down.

Getting Approved for Two Car Loans

There are a few key factors that will be considered for multiple loans. They are as follows:

Credit History

Not surprisingly, one of the first things a banker or lender will look at will be your credit history. They will obtain and review your information, which will include your credit score, repayment history, other loans on file, and so on.

This will be one of the main elements in determining your approval for another car loan. Even though the bank approved the first loan does not mean this second will go just as smoothly.

Proof of Income

In addition to credit history, those loaning you the money will want to see a proof of income, for obvious reasons. This shows them not only that you have money coming in regularly, but it provides an idea of how capable you are of repaying such debt.

Other Factors

Other factors that banks look at when you apply for a second car loan may also include your debt to income ratio. If your debt ratio is 50% or more, you may have trouble getting approved for a loan. This is true even if you have a decent salary. Writer and real estate investor Michael Bluejay notes on his website that each bank differs. But in generous cases, your bank may permit you to have a 42% debt ratio. You can find out how to calculate your income to debt ratio here.

Keep In Mind

Be aware of the “straw” purchase. A “straw” purchase is basically when you buy a car for someone else, but put the loan under your name. This is considered bank fraud, and thus, it’s illegal. One reason is because a car is collateral. If you are trying to purchase a vehicle for a loved one, you should sign as a co-signer or give them cash to put toward their purchase. They are not able to own the car if the loan is under your name. However, if the individual is your dependent, then it is a different case.

Think about why you need the car. Reconsider the loan to save on interest if you are able to pay straight cash. If you plan to only use the additional vehicle as shuttle only or for limited driving, it may not be worth taking out a loan.

The Effects of Having Two Car Loans

Taking on two car loans at the same time is a huge financial responsibility. Not only will you have the additional payment each month, but it will also affect your credit. Chances are that your credit score will take a hit and temporarily lower after you take out the loans. Furthermore, you will also have a higher debt-to-income ratio. This will make it more difficult to obtain good rates from future lenders. It will also make it difficult to improve your credit score with such a heavy financial responsibility.

There is some good news for those with good credit, limited debt, or a strong income. While a second loan may not impact your situation much, it is still wise to think through all your options before signing anything.

Conclusion

So, can you have two car loans at once? Yes, but not without requirements. Cases and circumstances do vary. You might want to make sure you would even qualify for a second loan by speaking with a few lenders before picking out that next car. You’ll also want to review what new interest rates you could have as they might be higher depending on your current loan status.

Have you ever had to take out more than one car loan at the same time? Share your experience in the comments below!

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