Beating Broke

Personal Finance from the Broke Perspective

Are Personal Loans Ever Right For You?

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Is a personal loan ever the right choice for you?  I’m not talking about payday loans, or those fun (or not) personal loans that happen in the back alley of a pawn shop, but honest to goodness personal loans from a bank.  Maybe you’ve heard them referred to as an unsecured loan.

A personal loan is usually called an unsecured loan because it has no property securing its repayment.  Unlike a car loan, mortgage, or other secured loan, there is nothing for the bank to come and repossess if you should default on the loan.  It’s a loan based on your credit alone, and your personal ability to repay it.  Because of the unsecured nature of the loan, the interest rate is usually a bit higher than a secured loan.

And, because of that higher interest rate, personal loans are generally frowned upon.  The only way to get a “loan” at a higher rate is to use a credit card.  Credit cards, actually, are a form of personal loan.  Think of them as a personal line of credit.

Are there good reasons to get a personal loan?

The answer, much like most other things related to personal finance, is that it depends.  Some people will tell you that they are an absolute no-no.  Don’t do it, under any circumstances.  I tend to lean a little bit more towards the middle.  I don’t think you should use them every single time you need a little bit of money.  That can get a bit cumbersome, and can lead to bad credit practices.  But, I also think that there are times when a personal loan can be beneficial.

Personal LoansWhen I used a personal loan.

I’ve borrowed money from a bank in the form of a personal loan.  Once.  It was the only time I really needed to do it.  It was near the beginning of our journey towards getting out of debt.  A journey we are still on, mind you.  After several years of very slowly building credit, we were on the right track.  And then stuff happened.  We needed some money to help pay for some bills.  Without anything to secure a loan, I was able to get a small loan from my local credit union.  It helped bridge the gap between what we needed to keep our bills current, and save our credit, and getting behind on stuff.  It wasn’t a huge loan, and it wasn’t any more than we needed.

Our usage is one way that I think that a personal loan can be a good thing.  There are other ways that I think they can be helpful.  Using them smartly, and only taking what you need is always the rule, though.  Using them to help bridge gaps in funding for capital investments in your company, paying off a higher interest rate credit card, and even for a little bit more to help pay for home improvements.  Obviously, using them for things that can be considered an investment.  Either an investment in the traditional sense in that it returns some amount to you, or investment in that it saves you an amount.

What about you?  Have you ever borrowed on a personal loan?  Do you think people should?

img credit: StockMonkeys.com on Flickr

 

Take Advantage of Super Bowl Sales to Save Money

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Super Bowl 2013 is on February 3, only a week away.  If you’re a football fan, you’re probably counting down the days and planning your Super Bowl party.  Your whole day, indeed your whole weekend, may revolve around the Super Bowl.

However, if you’re like me, you aren’t a big football fan.  In fact, I have no idea which teams are even heading to the Super Bowl this year. (Ed. note: 49ers vs. Ravens)

Still, fan or not, the week before Super Bowl is the perfect time to save some money, and lots of it.  The Super Bowl is a national, cultural event, and many sales revolve around Super Bowl viewing “necessities.”

 

 

 

 

 

Here are some things you may want to buy and stock up on while they’re cheap during the week before Super Bowl:

Super Bowl SavingsTelevisions – If you’re in need of a new television, you’re likely to see the lowest prices now, the week before the Super Bowl.  The prices now are often even better than those on Black Friday.  Of course, if you don’t need a tv, this isn’t a good deal, but if you’ve been thinking about replacing yours, now is the time to do it.

Cable/satellite packages – If you don’t yet have cable or you want to switch providers, now is the time.  Cable and satellite companies hope to snag new sports enthusiasts during the big game, and some cultural Super Bowl events, such as the notorious Lingerie Bowl, can only be seen on cable (as well as the much more benign Puppy Bowl).

NFL apparel – Get your favorite team’s jersey at a significant discount this week.  Even Victoria’s Secret gets in on this by offering discounted pink NFL gear.

Beverages – If you’re a family of soda drinkers, don’t buy your pop at full price.  Stock up during Super Bowl and buy enough to last you through the next big soda sale, which usually happens around Memorial Day.  Bottled water is also often on sale.  We only buy bottled water for our car trips when driving to conferences, but it’s nice to buy it when it’s at rock bottom price.

Snack foods – If you have a teenage boy or another member of the family who can’t get enough of snacks like nachos, chips, and cheese curls, now is the time to buy them while they are cheap.  True, you may need to hide them from your snack monster so they’re not devoured in a few days, but again, you can stock up and save for the next several months until they go on sale again around Memorial Day.

Don’t forget that other condiments like ketchup, mustard, and salsa may also be on sale now.

Foods you can freeze – You’ll also likely find chicken and ground beef on sale, as well as cheese.  Don’t forget that you can freeze these items, so stock up and feed your family for the rest of the winter with meat that you got on sale.

Whether you’re a Super Bowl fan or not, this week is the perfect week to stock up on some basics and buy some luxuries at a steep discount.

What is your favorite item to buy during Super Bowl sales?

Why I Don’t Use an Online Financial Tool

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I don’t use any online financial tools.  And it’s not for the reason you’re probably thinking of.  It isn’t because I’m afraid that my information is going to get stolen and some hacker is going to run off and steal all my money to buy the country of Dubai.  It’s not that I don’t find them to be useful.  In fact, I find them to be quite useful.  For most people who aren’t me.

Actually, the reason that I don’t use any online financial tools is that very few (read: none) of them seem to connect to all of my accounts.  I’m not a person who likes having only half the picture.  I like to see everything all at once.  Not half here, and half there, or one account here, and the rest over there.  Everything.  Part of this is my fault.  I use all kinds of accounts.  Most of them are online accounts and usually show up in any of the tools that I try and connect them to.  But, I also use some local accounts.  Those local accounts are usually the problem.

Ready For Zero

I tried using this not that long ago.  They’re a sponsor of the Debt Movement, and have glowing reviews around the web for their tool.  And, from what I’ve seen of the Ready for Zero tool, it does look like a pretty cool tool.  It allows you to set up your accounts, get them set up into a payment plan similar to a debt snowball and then helps you optimize that plan for the best bang for your buck.  Only one problem.  My local Credit Union accounts aren’t linkable.  If I can’t include a good portion of my debt accounts in the plan, it throws off the entire plan.  How can I expect the tool to give me accurate information if it doesn’t have accurate account information to go off of?

Adaptu

Adaptu is a little bit like Mint.  They both allow for linking all of your accounts (deposit and loan) and then their tool gives you a full overview of your finances.  There’s more to both, of course, but I stopped investigating when I couldn’t link up all of my accounts.  The culprit in both cases was, again, my local Credit Union account.

There are other tools, but every one of them I’ve tried has had a similar problem.  In most cases, it’s the local CU that is causing the hiccup.  Is that fair to the tools?  Probably not.  Really, it’s more of a poor reflection on the local institution than it is on the tools.

Yes, I could move my finances to another institution and probably start using some of these tools.  But, I’m lazy.  For a long time, I was forced to have an account there, so it made sense to just use it for all of my banking.  Now that I’m not required, I find that I just don’t want to tackle having everything changed to a new institution.  What a hassle to change automatic transactions, re-enter all my bill pay stuff, and then link a new account to the myriad of other places that I have accounts.  It’s just easier to not do it.

Except when I want to use an online tool.

Do you use any online tools?  Have you ever had problems with getting your accounts linked up in them?  What did you do about it?