When obtaining a home loan, you’ll receive two important documents from your lender: a loan estimate and a closing disclosure. On the surface, these documents are very similar, but they both serve different purposes. Here’s what you need to know about the differences between these two forms and what each means for you:
5 essential tips to save for an emergency
Emergencies occur when we least expect them, and to ensure long-term financial stability, it’s best to have a plan to weather them. When an emergency happens, be it a natural disaster, illness, or job loss, many people can find themselves struggling to keep up.
Here are five essential tips to help you save for an emergency:
Have an initial emergency fund
To start, it’s best to have an initial emergency fund with up to half a year of expenses of emergency funds. These funds are to be strictly used for emergencies such as medical bills, home repairs, car repairs, and other cases when you need money fast.
Be sure that your emergency funds are in an account that is easily accessible and doesn’t have early-withdrawal penalties.
Avoid high-interest payment plans & credit cards
To save effectively during an emergency, it’s wise to avoid high-interest payment plans and credit cards. These will cause you to pay more than you usually would over time. If you must get a payment plan or credit card during an emergency, research your options, and choose those with lower interest rates. A financial advisor will be able to help.
Rework your budget
Rework your budget during an emergency to cut unnecessary expenses. Make a list of all your expenses and income, including monthly debts, payments, and non-essentials like eating out. You may have to tighten your belt during an emergency, but it will be worth the effort to get through it.
Put any extra money you receive into emergency savings
Should you find yourself with some extra cash, put that towards your emergency savings. That will help give you a boost in savings to draw from in case of an emergency. One of the easiest ways to save is to have a portion of your income automatically transferred to a savings account when it is deposited into your account.
Setting up a high-yield interest online savings account is also a great way to get the most out of your savings. High-interest rates mean you can earn money faster. Remember that you will be waiting longer for those funds to be available after you make a deposit.
Talk to your lenders about breaks
Talk to your lenders about temporarily suspending monthly payments, if you cannot afford them or are behind due to an emergency. Your lender will work with you to find the best option for your situation.