TOO GOOD TO BE TRUE LOANS-how to avoid them and keep what’s most important to you and your family

That is a long title, but when you make financial decisions they can have long range implications for you and others.  Here are just a few things to consider:

Debt consolidators

These companies will offer to help you get out of debt.  But they won’t promise to get rid of all of it and they charge to help.  You may do better communicating with your creditors yourself.

Reverse mortgages

Ask yourself, did that actor say he had one?  Probably not.  There are restrictions and they can take your home. Better to ask if you can defer a payment when times are tight. (this could also refer to a car loan)

Equity loans

Borrowing against your biggest asset, your home may not be your best option unless you are putting in a heating system or something else that is part of the structure. Avoid doing this for a medical bill, where you may be able to make small monthly payments.

Car Title Loans

It’s your car, don’t give it away too easily.

It is easy to fall prey to these offers when one is desperate and falling behind.  That is when to take a deep breath before making a bad decision.  Let’s look at the order of importance in bill pay.  I call it the pecking order.

chicks and roosters
Photo by Quang Nguyen Vinh on

The pecking order – what to pay first when financially challenged:

  1.  You need a roof over your head
  2.  You need transportation
  3.  Utilities:  you need heat and to be able to communicate (but try to get on lower  budget plans)
  4. Mandatory medicine (you may need some special meds, but ask if you can get samples or on a generic)
  5. Food – we all need to eat, but eating at home is cheaper.  Buying the whole chicken costs less and feeds more.  Fresh food can keep you healthier thus saving on medical bills.
  6. What else is important may vary greatly

Where does charity giving fit?  I am aware some people of faith consider giving mandatory, and would make it Item 1.  If you feel that way, then understand you are a steward of all you are given. If in debt, you may start giving a little and increase percentage as you get out of debt.

Feel committed to a financial obligation?  Then consider a temporary part-time job to cover that expense.

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