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March 16, 2021

Will the U.S dollar value drop in the next few years?

It is not a secret for anyone that the U.S dollar is one of the strongest currencies in the world. Historically, there have been times of ups and downs regarding the value of the dollar, which is mostly determined by the interest rates set by the Federal Reserve.

Of course, the U.S dollar index compares our national currency to other strong currencies in the world, such as the euro or the pound. This creates a perception of how weak or how strong our currency is at this very moment, influenced, as we said before, by Federal Reserve policies, interest rates of other currencies, and general perception of the U.S government bonds in recent years.

However, the pandemic created a big economical impact on our country, which forced us to analyze whether or not we are going to face a high inflation scenario in 2021. Fortunately, after the US government elections, the US political risks considerably decreased.

Besides, the vaccine is being successfully administered in the entire country, so we can hope to experience a big economic growth in the next few months. Either way, we are going to analyze the inflation forecast for the next 5 years so we can have a bigger understatement of what’s really happening with our beloved dollar.

What’s the U.S inflation rate forecast for 2021?

The health crisis isn’t over yet. There are still many factors that are directly affecting the U.S economy, but, as we said before, this year the recovery is expected to run smoothly. Nonetheless, the different forecasts of the U.S dollar value may be a little distant from each other.

Some experts are expecting more pain ahead, mostly caused by government debt and protectionist policies enforced by former president Trump, which created tensions with China. Even though the economy seems to be back on track, we still need to analyze the results of the vaccines and the job market in the country.

This is why big firms such as Goldman Sachs warn that the U.S dollar is, at this very moment, overvalued. This means that even with all the problems that our country experienced in 2020, the value “didn’t drop as much as it should have, and will have at least a 9 percent fall over the next 12 months”, according to this investment group.

All these predictions are combined and carefully analyzed by different agencies. That being said, the expected inflation range for 2021 is 2.2 percent. This is a little more than the 2020s 1.6%, but we still need to see how the pandemic is coming to its end this year (or not).

It is important to mention that this 2.2% represents the Core inflation, which totally excludes the costs of energy and food.

What to expect regarding the U.S dollar value

It is safe to say that the global inflation forecast might be a lot worse than the one expected in the United States. With gold prices struggling lately and cryptocurrency values on the rise, economists are facing a strange situation that they need to comprehend to its fullest. Obviously, the Fed is not going to talk about the changes in the opinion of policymakers after the dramatic rise (and fall) of certain stocks, such as GameStop.

The main goal of the Federal Reserve is to keep the interest rate near zero until we see the inflation “back on track”, at least compared to what we might experience according to a moderate excess. The job market will approach a maximum employment range, which is kind of the promise made to keep these rates relatively low in 2021 and all the years to come.

Jerome Powell, Fed Chair member, expresses that patience is key when it comes to determining the real U.S dollar value in the months to come. The plan is clear and it’s aiming to stabilize an economy that was hardly affected due to the coronavirus, not only in the U.S, but all over the world.

Education is the key to overcome economic crises

Evendentelly, inflation is something that we, the people, see as a harmful factor for our pockets. However, the Fed has historically considered inflation as something good for the economy because it represents a growth in the general economy while helping the central bank act in time during the next crisis to come.

Yes, we are going to see some volatile prints on inflation coming up, but it all depends on how the market is really going to react to the circumstances at the moment. It’s a cyclical process that has happened before and that will happen (maybe) forever.

The best advantage that we can have is to be financially educated regarding currency issues. The understatement of what we can expect for the future will give us a bigger picture of how to react and how to protect ourselves.

For example, right now, the interest rates for loans are at their lowest. So, it is a pretty good time to borrow money since it’s cheaper than in other periods of the economy. And due to inflation, paying off debt it’s even easier, since what you borrow today will have less value at the end of the year.

Therefore, requesting a loan to fix your house, get the car you want or to pay other debts would be a smart move.

February 19, 2021

Personal Loans steve

Will they pass a new stimulus check and what can you do in the meantime?

When the magnitude of the pandemic became obvious for all of us, the U.S government came out with an idea to resurrect the economy: the stimulus checks.

Back in march, 2020, each person making $75.000/year or less received $1.200 ($2.400 for couples making $150.000/year) directly into their bank accounts since the weekend of the 11 and 12 of April. In the second round, back in December, every person received $600 ($1.200 for couples).

Of course, the COVID relief bill measures were a big help for all of us, but if we analyze them closely it is easy to determine that they were not enough. Knowing this, we can’t help but ask ourselves this next question: will there be another stimulus bill? If so, when it’s going to arrive?

Even though the tax season is about to start on February 12, it is important to know that the stimulus payment you received doesn’t count as income. This means that you don’t owe any tax on it, so you don’t need to worry about increasing the amount of money you owe when you fill your 2020 tax return, all of this according to the IRS. Either way, it is important to keep ourselves up to date so we can be prepared for every stimulus check update.

What we know about a third stimulus check

First of all, the Congressional Democrats are using a legislative tool to speed up the process of getting a third check. That payment should be a little different from the payments given before, so some people might get a lot of money, and some people are going to receive a smaller check. This entirely depends on the formula used to determine which groups are eligible and which aren’t.

The largest stimulus proposal is 1,400 USD per person. Of course, this is being targeted to families with middle and lower incomes according to the parameters used to determine the range of income. It is clear that not everyone will qualify for a 1,400 USD payment. In fact, the latest stimulus bill details are set to exclude people with an Adjusted Gross Income of 100,000 USD a year or more.

Nonetheless, this cut-off will depend on the nature of the taxpayer – if we are talking about heads of households or married couples, the AGI can increase up to 150,000 USD and 200,000 USD respectively. That being said, a third stimulus payment can possibly arrive in early March, all depending on how fast the bill goes to the Senate.

Naturally, not all people will receive their funds in an immediate way. Some of them will have to wait until late April due to all the variables that can affect each person depending on the tax season.

We need to remember that former President Donald Trump signed a stimulus bill back in December with only a 17-day limit to send all the checks. This caused a lot of direct deposit errors and bureaucratic chaos, so the authorities are entitled to prevent these kinds of mistakes from happening again.

Then… What can I do in the meantime?

It is possible to find any missing money that you need to claim if you file your taxes sooner. We highly recommend you to finish all your responsibilities with the IRS as soon as you can, mostly because it’s widely known that your possible check and your taxes have a strong relationship. This means that someone who completes the process without any problem will probably get their stimulus check faster than someone who files a tax extension, for instance.

In addition, let’s remember that this third payment will include dependents of any age, like college students and people with disabilities. Besides, this check is set to consider all mixed-status households. For instance, if you are not a US citizen but you have a child born in the United States, then you might be eligible for getting this new stimulus.

Obviously, this new increased margin is not considering undocumented workers, at least not so far. The best advice that we can give you is to keep your documents and taxes up to date so you can get your payment as soon as you can. This pandemic has been a nightmare to most of us, so every help that we can get will be appreciated by the American people.

Let’s include a section where it talks about instances where they really need the stimulus check, maybe they lost their job or the pandemic put them in a worst situation and they have no other choice but to get a loan until they get their stimulus check.

November 15, 2020

Insurance Savings steve

How To Evaluate Taking Out a Personal Loan

If you find yourself strapped for cash, a personal loan may help you close your budget gap, no matter what your income bracket.

You may consider taking out a personal loan for a variety of reasons, including completing a home improvement project, making a major purchase, covering educational expenses, or paying an old bill that is accruing interest. In some cases, it can be quicker to take out a personal loan than a home equity loan, and you may not have enough equity in your home for a home equity loan in the first place.

Before you sign on the dotted line, however, there are a few things you should know.

What is a personal loan?

Personal loans are known as “unsecured” debt because they are not backed by collateral, such as your home or car, as is the case with a mortgage or auto loan, respectively. Lenders will use your credit score to help determine whether to give you a personal loan and at what interest rate. Depending on your credit history, the interest rates on personal loans can be higher than secured loans, so you may want to consider personal loans only for expenses you intend to pay off quickly.

Personal loans aren’t like credit cards, which are revolving loans. Credit card loans and other revolving loans have no fixed payment term and often have a fluctuating interest rate. Rather, personal loans are a type of installment loan. Installment loans have a fixed repayment term, usually two to five years, and often carry a fixed interest rate. You’ll receive a lump sum up front and then pay the money back (plus interest) in regular monthly installments.

If you are looking for a personal loan, look for a fixed-rate agreement. While most personal loans have a fixed term and interest rate, there may be exceptions, so be sure to read the fine print.

Your credit score will determine the affordability of a personal loan

In general, your Equifax credit score ranges from 280 to 850, It’s an educational score—the score you see may differ from score a lender sees. A “very good” credit score ranges from 725 to 759, whereas 760 to 850 is considered “excellent.” The higher your credit score, the more affordable your loan may be. For example, one personal loan advertised on Bankrate.com carried an interest rate of 6.9 percent, which is several percentage points below the average credit card interest rate (add credit report link here)

But for borrowers with credit issues, the interest rate on a personal loan may be the same or more than the interest rate on a credit card. The average interest rate for a personal loan was 10.74 percent in October 2016, which is about the same as the average interest rate for a credit card. Some personal loans may even carry interest rates as high as 35 percent.

A high interest rate could result in large monthly payments, which can become unaffordable and cause you to make late payments or to miss payments completely. This may affect your credit score, and missed payments could remain on your credit file for up to seven years.

While you will want to shop around for the best interest rates available, be sure to compare the total cost of the loan, not just the interest rate, and speak to different lenders. Also bear in mind that a low interest rate could be an indicator of additional fees and conditions.

The potential risks involved with a personal loan.

Unlike a credit card, which you can pay off over an undetermined amount of time, a personal loan must be paid off in a fixed amount of time. This can mean you will be paying off the debt faster, but it can also pose problems if the loan isn’t paid off within the loan term. Because the loan isn’t secured by any property, if you don’t pay back the loan, the lender could take you to court and sue you. In addition, paying off your personal loan too early may result in extra fees. Some personal loan agreements include prepayment penalties if you pay off your loan before a certain date.

Finally, be wary of scammers who use false advertising to lure you into a fake loan agreement. One example is a so-called “advanced fee” loan, where you pay an advanced fee for a loan you never receive. Once you wire the money, it’s gone—along with some of your sensitive personal information.

Many credit unions have alternative programs that provide loans at low prices to people with poor credit scores. Additionally, credit unions are not-for-profit entities, so they may be able to charge lower interest rates than other banks.

If you qualify, a personal loan can be a great way to finance your expenses at a low cost, as long as you don’t get a larger loan than you need. However, before you consider taking out a personal loan, you may want to practice good credit habits to make sure your credit score is the best it can be. Improving your credit score may increase your chances of getting a loan with a lower interest rate.

November 6, 2020

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Tips and Keys to Manage Your Debt

Overstating the importance of a debt not easy. You will gain the intended benefits as long as you utilize the finances as per your intentions. Although debts are perfect for funding investments, life necessities can be so overwhelming for your earnings, warranting an urgent borrowing. But this debt aspect should not be of worry, the tradeoff between interest and utility of the goods and services and, in some cases, inflation can be beneficial to you and your financial lender.

After borrowing, you have to take some precautions to ensure that the debts levels do not get out of hand and make you bankrupt. The following tips and keys to manage your debts are all that you need in your quest for financial freedom.

How to Manage your Debt

Maintain Your Saving Culture or Start to Save

More often than not, borrowing might give you a taste of what money can do triggering an insatiable demand for goods and services that you cannot, otherwise, afford. You should ensure that you continue to make deposits into your savings account or start to save. You can even increase the savings ratio of your income.

Back Your Debts Against Less than 100% of Your Assets

In some cases, you might be offered a debt secured against your assets. There are times when investments funded by borrowing do not yield positive returns. In such a case, the lender might come knocking at your door seeking to reclaim the credit through asset acquisition, if the ration of your assets to the debt is less than 1 you might get a lifeline of rebuilding your financial life later on after security acquisition.

Do Not Modify Your Budgets

Sticking to your financial plan is vital to ensuring that the debt funds serve your needs optimally. Additionally, a budget makes you make the best out of the finances by getting you what you aspire to own.

Avoid Using Credit Cards

Most psychologists and behavioral economists subscribe to the school of thought that credit cards often enhance impulse buying, often translating to overspending. Even though you may be an individual who exercises self-control in regards to demand for goods and services, you should develop a tendency of shopping on cash basis only most of the time.

Keys to Managing Debt

Repay the Debts as per the Agreement Terms

You should closely monitor the credit card’s closing date to deposit the repayments. In such a way, you will be avoiding penalties due to late payments. Moreover, you should take into consideration the various interest rates: If you have a number of debts to service, always pay on time the debt with the highest interest penalties and then proceed to settle the credit repayments for cards with lower interest rates. Although it might be harder to pay off the debts as per the agreement at first, you will definitely realize that with time, you will be settling the balances more easily.

Do not Borrow Additional Money If You Have Pending Debt Repayments

In the event that you find yourself desperately in need of a debt, while still servicing another debt, you have to realize that you are biting more than you can chew. Living your life and abiding by your means can be the greatest tip for managing your debts.

Even in the time of debt crisis, you should not despair. A conversation with your lender can proffer to you the much-needed reprieve to get you back on your feet in the journey of attaining financial freedom by having manageable debts.

October 12, 2020

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How do Title Loans Actually Work?

There certain times in life when we need to spend more cash than we have on hand. The most common way is to borrow the money and pay it back a little at a time if you have reasonably good credit. A personal loan is a type of loan that can be made without collateral, so the lender has no legal recourse such as foreclosing a home loan or repossessing your vehicle for non-payment. It’s used for everything from funding an education, sorting an emergency, financing a new business venture to purchasing luxury items or taking a lavish vacation. Whenever you are looking to obtain a personal loan, it is critical to understand that there are many new, different personal loan options to consider. Among them include:

Young happy family couple dreaming of future wealthy life

Installment loans
An installment loan is repaid with a set number of scheduled payments. What happens is you borrow a specific amount of money from a lender and you agree to pay the loan back, plus interest, in a series of monthly payments. To qualify for an installment loan, a lender will look at your credit score, your annual income, and your debt-to-income ratio.

Payday loans
A payday loan is sometimes also known as cash advance. It is a small, short-term loan secured against your next paycheck (expected to be paid in a lump sum) and is typically used for emergencies only. It carries exorbitant interest rates, excessive fees and is considered as one of the most expensive borrowing forms. To be eligible for a payday loan, you simply have to show proof of employment (e.g. a paycheck).

Peer to peer lending
Peer to peer loans also referred to as P2P is a recent entry in the world of personal loans. In this type of lending, loans are financed by real people instead of financial institutions. Lenders are matched with people who are looking for a loan, through an online platform. These individual lenders are ready to take on more risk making the credit requirements for this financing to seem more flexible.

Debt consolidation
A debt consolidation lets you move your debts into one manageable low-interest loan payment to help you pay it off more effectively. A lender provides you with the money to pay off your existing debt with other lenders so that you only have one debt to repay rather than several that are difficult to keep track of. You can lower interest rates by consolidating your debt into one low, fixed-rate monthly payment.

Line of credit
An overdraft or line of credit allows you to overdraw your account to an agreed amount established by the lender (there is a limit to the amount you can access.) Borrowers only pay interest on the money used and not on the maximum amount one can borrow.

Credit card cash advance
It refers to a short-term loan that you can take against your credit card, up to a certain amount. The cash comes from your credit limit, which means you have to pay it back with sometimes very high-interest rates.

Secured loan
If you plan to make an expensive purchase such as a new car, house, furniture, etc., then you will need a secured loan. A secured loan will need you to commit the asset that you are buying or any other asset as security so that in case you fail to pay, the creditor can take your property and use the collateral to recuperate their money. These loans come with low-interest rates because they are considered low risk.