GBG Vitality- Viva Vitality: How to Manage Loans and Savings

Thursday, March 18, 2010

How to Manage Loans and Savings

Learn more about your Body, Mind and Spirit with Viva Vitality brought to you GBG Vitality.

If there’s something you’ve always wanted to have that requires shelling out a significant amount of moolah, taking out a loan might be a good way to finance this goal.

But before you rush to the nearest bank for the loan, consider some things first. When applying for a personal loan, scout for the best offer in town. Avail of promotions, such as waived processing fees and other promotional giveaways. Once you’ve reviewed and compared different kinds of loan offerings in the market, you’ll have an easier time to compute if the required monthly installments you have to pay to the bank will fit within your budget.

Consider the general picture before you go for a loan.

After you’ve invested in and started paying for a bulk capital, you’ll want to make sure that you still have more than enough to cover your other expenses, so you’re never running on empty. Your loan’s payment plan should fit your monthly budget after all regular monthly payments have been deducted from your net monthly income, and you still have some savings to set aside. Remember, it is also just as important to save up for a rainy day and in case something unexpected happens to you.

On the other hand, if a close personal friend has asked you to be a co-maker or guarantor to her loan, just remember that being one is practically tantamount to making the loan yourself. This means if your friend cannot pay the monthly amortizations, the lender has the right to go after you to settle the debt. Protect yourself by getting as much information about the loan, reviewing documents, and requesting for copies of all paperwork. For your security, ask your friend to sign a written agreement with you that says you’ll only be responsible for the principal balance, so that you won’t get charged even when she defaults on her debt. When you do sign the papers, try to keep yourself updated on the status of the transaction as much as you can.

As for your personal purchases, try scheduling when you use your credit card, like a day or two before the cut-off date.

This way, your purchases will be charged on the next month, giving you more time to source added income to pay them off. Also, using your credit card monthly is a good way of racking up promo points, which could translate to rewards, incentives, and freebies. It also shows the credit card company that you’re a favorable customer, so there’s a good chance they could waive your annual fee come end of the year.

So, sit down, take a pen and paper, and list down where your money goes each month. Doing so allows you to take a good look at your monthly expenditures, as well as how much you can set aside for the future. There are different benchmarks when computing for ideal savings on your income. Some people claim that you should set aside at least 20 percent.

Once you figure out your spending patterns, you’ll be able to determine what to cut back and decide on the best amount to set aside from your savings.