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Why You Need an Emergency Fund

Most financial experts agree that you need enough in emergency savings to cover 3-6 months of expenses. But according to a 2013 survey by Bankrate.com, 76% of Americans don’t have enough savings to last 6 months, 50% have less than 3 months in savings, and 27% don’t have any savings whatsoever.

The fact that one fourth of Americans are literally living paycheck to paycheck should be a sobering fact. That’s because without an emergency fund, any type of emergency—getting laid off, medical bills, car repairs, etc.—could send you deep into debt.

Fortunately, no matter what your current situation, you can prepare yourself now for these types of emergencies.

Why do I need an emergency fund?

An emergency fund is set aside to help cover unexpected expenses that are guaranteed to pop up in life. It’s not a matter of if these expenses will come around—it’s a matter of when.

How much should I put in my emergency fund?

Things break around the house, and cars need to be maintained and repaired from time to time. However, it’s the unexpected things like medical bills and losing a job that can really have negative effects on your finances for the long term.

The reason financial experts recommend you keep 3-6 months of expenses in savings is to provide a cushion for a job loss. That way you can maintain your lifestyle long enough to find another job. And when the other unexpected expenses come around, you’ll have enough money in savings to cover those, too.

How do I get started?

If the average family/person pays out about $2,000 in rent, food, gas, and other bills each month, then they should aim to have $6,000 to $12,000 in a savings account.

That amount can be daunting for a lot of people, but you don’t have to achieve it right away. If you can only set aside $20 a week, it will add up; and after only a year, you’ve saved over one thousand dollars.
Have patience as you build up your savings. Remember that having something in your savings account is better than nothing. You will be well on your way to financial independence, which brings great peace of mind.

Sticking with it

Make sure you don’t tap into your emergency fund unless it’s an absolute emergency. Don’t let yourself be tempted to use the money to take a vacation or buy something impulsively—you’ll lose months of progress if you do.

Saving money for a rainy day is a life-long endeavor. Once an emergency does come along—and believe me, it will—then you’ll need to build up your savings again to prepare for the next emergency.
Ultimately, financial independence is worth all the hard work. You won’t have to fall back into debt every time an unexpected bill pops up—instead, you can tap into your emergency fund when it truly is an emergency.

So don’t be afraid to start your emergency fund today, even if you can only start small. You’ll be happy you did.

If you do find yourself in a financial emergency, and you don’t have enough saved up, you can always apply for a cash advance or payday loan from Check City.

The Smart Way to Spend Your Tax Refund

Every year when you file your taxes away, you look forward to the big chunk of money you’ll be getting back afterwards. You could do anything with that much money! But you’ll probably end up just spending it on food and movies and clothes. This is why many of us come to abhor the tax refund, and would much rather get that money over a long period of time than all at once. Here’s how to take care of your tax refund when it comes.

By the Numbers

In 2011 the average tax refund was close to $3,000. If that money had been divided up over the year, Americans could have been taking home, on average, about $250 more a month. The only way to keep this money safe in your wallet is to start your taxes early, and work with a professional to fill out new W-4 forms and have the proper amount of tax money pulled out of your paycheck.

Keep Count

Before you accidentally spend your entire refund this year on just eating out, keep track of the money that you get back. Put it in a separate savings account while you create specific goals for it. Plan to spend it to help you get out of debt, or to pay for your schooling. Plan to use it for study abroad or buy the car you’ve been eyeing.

Keep Your Eye on the Ball

Once you have made a goal for yourself, stick to it. Do not be tempted to spend a dime elsewhere. As long as your goal is responsible, let yourself achieve it by saving money and spending it at the right time. During that time of year there are many deals available as businesses are aware that people are starting to get their refund money back and have more money to spend. However, do no settle for a deal that may take away a substantial amount of your money.

Emergency Fund

Do not underestimate the power of an emergency fund. Even if you have insurance, it is important to always have back-up money for any reason. You never know what could happen and you would hate to be caught in a tight spot with limited options. Give yourself a fall back plan that you can contribute to and rely on every year.

Contact the Professionals

If you have trouble saving large amounts of money, it would be in your best interest to contact a tax professional in order to get started on avoiding tax refunds in the future. You will instead be able to save this money over time, giving yourself more options all year round, not just in April. One of the services offered at Check City is access to these professionals that can change the way you budget entirely. Contact us today to find out how you can be saving money all year long, or how to prepare yourself for a large tax refund this year.

Teaching Kids Good Money Habits

Tax season is here and while it’s easy to find yourself in “survival mode” around this time of year, just trying to get the taxes done with, it can be a great time to teach your kids about the basics of taxes as well as other good money habits. It’s never too early to start teaching your kids how to handle money. The first attitudes your kids have about money could be the one that influences their spending habits as adults. Make sure your kids learn to spend money wisely and avoid unnecessary financial crisis later on in life.

Start with Pocket Change

First, help them understand the importance of money. Start small, working with loose change. Young kids won’t understand the true meaning of credit cards and bank accounts, so use cash to teach them how to handle money. Try keeping a clear bowl of loose change and show them visually how money can add up over time.

Take Your Kids Shopping

A good technique is to take your kids shopping with you. This will probably be a hassle and it may be embarrassing if your kids are screamers, but it will pay off in the end. Teach them that just because you have money to buy groceries, it doesn’t mean you can spend extra for unnecessary candy bars. When they ask for this stick of gum or that doughnut, tell them no. Save those kinds of treats for special occasions. (You can teach two lessons at once that way. Buying them spontaneous treats in the grocery store can be rewards for good behavior, service, or doing chores.)

Also, when shopping, let them see you looking for sales, using coupons and shopping smart. Then when you get home, throw some money in the change bowl at home to show them how much money you just saved. Once the jar starts getting full, you can use that money to take them out to an arcade, carnival, or theme park. They will learn that saving money on a daily basis leads to great rewards.

Make Them Work for Money

Second, teach them the importance of earning money. Avoid just giving your kids an allowance. Instead, have them do chores around the house to earn it. If they want extra money, they can take on larger projects. This will teach them the importance of work and the value of money.

Set Up a Savings Account

Third, as they get older, have them set up a savings account. Allow them to spend some of their allowance right away, but have them put most of it to their savings account. Let them take trips to the bank and see their savings account grow.
As your kids get even older, let them manage their own money. It’s ok to let them make some mistakes on their own so they will learn for themselves how to handle money.

Always be there to make suggestions or guide them, but let them know that you trust them to use their money wisely. It’s better to let them learn their lesson in high school, blowing their small savings on something stupid and realizing that they can’t afford to go to junior prom, than as an independent college student who has to drop out because they wasted all their money on a Mercedes.

Teach your kids to manage money now and watch them grow into responsible, money-smart adults!

Saving Big on the Small Stuff

When it comes to saving money, it may seem like the only surefire way is to put huge amounts of money in the bank in the hopes of great interest and great rewards. While this is certainly an effective method, it is not the only way, and consistent small additions to your savings account can also help you along your way.

If you have a goal to save towards, saving becomes a lot easier, and you can keep that goal in mind as you make your daily decisions. If for example, your family is saving for a big trip, you can think of the expenses for that trip and then start making smarter financial decisions to help you work towards your new and clear goal.

Stop Eating Out

One great first step in this money saving technique is to eat out one less time a week than you usually would. Then, calculate how much you would have spent on your meal out, and put that money in to your trip savings account. This is a simple saving method, and you won’t miss the money because you would have been spending it otherwise.

Make it Automatic

Another great way to save money simply is to set up automatic savings with your bank, this means setting up a dollar amount that you want automatically transferred from your checking account to your savings each month. This will save you the hassle of transferring the money yourself each month, and will prevent you from spending that money before you have a chance to spend it.

Save Your Change

A third great tip is to count your pennies, literally. Make an effort to pay for certain purchases with cash, then take the extra change and put that into savings, this method will help you to save small amounts of money that will quickly add up to bigger savings.

Fight Impulsive Spending

Another useful tip is to make and keep a savings goal to save the same amount that you spend on small impulsive purchases. This means that each time you buy a drink at the gas station, a movie ticket, or a trip to the zoo; you should put the same amount of money into your savings account. This method will help you to think more carefully about your small purchases, and will also ensure that your savings account balance continues to grow.

Make and Keep Short Term Goals

By making small and attainable short term goals to lead up to your long term goals, you will find yourself more able to succeed, and your progress will be much easier to track. As you meet these smaller goals, you will be able to see yourself approaching the long term goals you have set for yourself.

Strive for efficiency, buy what you need and the occasional well thought out splurge; don’t make small daily splurges without accounting for them and saving money accordingly.

With all of these small saving strategies, you will be able to meet your saving goals much more simply, and after you build a habit, you won’t even need to think about it anymore. Start today, and you will be on your way to your next financial goal.

Teaching Your Kids to Save Money in 2014

In several posts so far this year we’ve covered several ways that you can improve your financial situation this New Year. In today’s post we’ll cover several ways that you can “pay it forward” to the next generation by teaching your kids how to be financially responsible. Parents are responsible for teaching their children countless things about life and how they should be living it. While certain lessons, like being nice to others and treating people with respect, might be more intuitive, the concept of teaching children how to have the right attitude about money can often be a bit intimidating. Below we cover several simple ways that you can start teaching your kids to save more money.

Good Example

Although this should be common sense, it bears mentioning that the best thing you can do to teach your children the right way to deal with money is to be a good example. While exactly what this example should be depends on your financial situation along with a number of other circumstances, it is extremely important that you display the right attitude regarding money in front of your children.

Too many parents assume that their children simply don’t understand enough about money for their behavior to be affected, but children are often more intuitive than we give them credit for. So make sure that you follow good money principles as a first step to instructing your children. Most children will see their parents swipe their credit cards at the store or take out loans but they won’t understand the consequences of those things unless you teach them. Be a good example by keeping your credit cards paid off and paying off your long term and short term loans as quickly as possible.

Piggy Banks

Feel free to use one of the most timeless ways of instructing young children about money: the piggy bank. In addition to providing your child with a piggy bank, make sure you take the time to explain the concept behind it; that sometimes they will have to save for things that they want. Often it is a good idea to introduce a piggy bank into your child’s life when he or she wants an expensive toy or item. That way, you can teach your child how saving money can help them buy what they want. Additionally, your child will begin learning self-discipline as he or she learns to save money they receive instead of spending it immediately.

Encourage Responsibility

As your child gets older, it is generally a good idea to begin to allow them to make their own money decisions. While parents will generally choose to prevent their kids from spending money on something they will probably regret, this is actually one of the better opportunities for teaching the value of good money management. So within reason, allow your child to make a mistake with their money. As much as they value your advice, a child will remember the consequences of their personal decisions much more vividly.

There is no perfect way to teach your kids how to properly deal with their money. Chances are that at some point you will probably witness your child displaying an attitude towards money that you do not necessarily approve of. Above all, just remember to be patient and understand that good money management skills come with time. As long as you remain willing and able to set a good example and advise your child appropriately, they will learn how to be smarter with the money they receive.

Saving by Purchasing Generic Brands

Each time you go to the supermarket you’re faced with a choice, should you buy the product with the bright, colorful packaging, or the boring generic packaging. We obviously know that buying generic brands can save money but there is always the unknown factor of quality. Can we trust these spin-off brands or are they creating products that just don’t fit the mold? These are questions that every consumer has but here are some must-knows about generic brands.

In this post we’ll cover some of the top reasons you should start buying generic whenever you have the choice. As you read through these points it’s important to remember that for many people simply switching to generic brands whenever possible can mean the difference between staying within your budget for the month and needing to dip into emergency cash.

Sometimes Expensive Means Lower Quality

Whether you’re shopping for sugar cereal or even beauty products and sunscreens sometimes going with the big brand isn’t the best option. Why is that? Well sometimes companies spend so much money on brand management, marketing, and flashy bottles, and put less emphasis on the actual ingredients. This can lead to you paying more for a lower quality product.

Doctors Don’t Care

Doctors are doing it so why shouldn’t you? The interesting thing is that most consumers think that the brand name means something special with certain medication. Doctors and Pharmacists will buy the generic brands because they know that they have the same ingredients. Sometimes they just aren’t as flashy though so we have to wonder if it is alright to use them. It is important to think about what you are buying. We are talking about over-the-counter drugs here, so you can be assured that they have passed all of the requirements of the Food and Drug Administration. This is the same when it comes to buying baby formula or other nutrition based supplements.

Generics Typically Perform the Same

This is true with many things. Batteries for instance, have the same chemical make-up and will last about the same amount of time. Forget the commercials, sometimes you just have to realize that they are just the same thing, just with a fancy brand label slapped on top of them.

Does that Name Brand Water Really Taste Better?

When you are getting bottled water, you can expect that your bottled water tastes like water. That is, that it is tasteless and really the same as other bottled water. Some people get lost in the brand names though and start thinking because it comes from a famous mountain peak or lost river in the middle of who-knows-where, that it deserves more attention. The honest truth is that there are industry standards that have to be met and everyone is reaching that same standard or they aren’t hitting the market. So if you need bottled water go cheap and easy. Your wallet will thank you in the end.

What About the Chefs?

Sometimes we get this ill-conceived notion, that chefs and great cooks only buy the most expensive brand name items. This is far from true though. When it comes to getting most of the kitchen staples like flour, salt, sugar, and baking soda, chefs go generic just like your local market.

So the next time you go out to get your ketchup, mustard, or even your cereal. Remember that you are paying a lot for the label and not getting much added value in return. Don’t feel guilty for buying generic brands. All this says is that you are thrifty and have done enough homework to know that generic doesn’t necessarily mean that it is junk.

Resolving to Save More in 2014

We’re seventeen days into the New Year and while some people have already broken their New Year’s resolution, some people are still trying to figure out how they want to improve themselves in 2014. Whether you want to be smarter, more active, of more compassionate, you can set goals at this time to improve yourself, and come to appreciate your capacities even more than you otherwise do. One of the best resolutions you can make this winter is a resolution to save more money.

Having a buffer of savings is extremely helpful for everyone. This can come in handy when emergency strikes, you find something you just have to have, or to build interest and increase your funds for the future. By saving money regularly, you will be able to count on having something to fall back on if you ever find yourself out of work.

Saving More in 2014

As you begin saving this year, you may feel like there isn’t much you can do about it. But, in reality, there are many ways to save money each year, and by taking advantage of opportunities to save, you will find yourself much more financially secure, and more able to care for yourself, and anyone who is depending on you.

One of the best things you can do to help yourself save more effectively is to set up automatic transfers from your checking account to your savings account. This will allow you to make deposits into your savings account without having to lift a finger. And, by doing this, you will be able to maximize your savings, while minimizing the possibility to forget to save.

Loose Change Adds Up

Another important saving option is as simple as merely saving the change from purchases you make. By saving these small amounts, you will find yourself adding money to your savings account quickly without noticing a lack in your other account. Change will start small, but as you consistently save, you will see it adding up to what can be significant amount.

Invest For the Future

Another great saving tool is investment. Whether you take out a CD, which has low risk but low rewards, or invest in a more substantial and risky endeavor, by investing, you will be able to make your savings work for you. Especially in riskier investments, you should make sure to only put out an amount you feel relatively comfortable losing.

Also, as you look to invest, it is a good idea to consult with a financial professional so you can put your money to the best possible use. By consulting carefully, you will be able to make informed financial decisions that will affect your financial health positively and help you to become even more successful, by expanding your portfolio and increasing your buffer.

So, this New Year, think about making your financial security your resolution. Through this simple step, you will be able to increase your security and provide yourself with a buffer of protection for both emergencies and any time you want to splurge. Take this step this year, and you will find your financial state much more secure.

The Post Christmas Online Shopping Addiction

Whether you’d like to admit it or not, shopping is addicting. There’s something about seeking out the best deal, finding something you love and being able to purchase it. Nothing gives you that “high” more than buying gifts for the Christmas holiday because when gearing up for Christmas, you not only get to experience that “high” when shopping for yourself, but also your loved ones.

While buying gifts for friends and family is a good thing, having the desire to keep that shopping high going after the holidays can be dangerous for your bank account. In this post we’ll cover several ways that you can avoid over spending as you continue to shop online after the holidays.

After the holidays you may find yourself shopping online and feeling the itch to just buy everything. Even for casual online shoppers, we all have moments of weakness. We waste good money on stupid things that we really don’t need. It could be music, jewelry, clothes, tools, gadgets, you name it. How do you shake the urge to buy when you know you don’t need it? Here are a few tips that hopefully will help.

Set a Limit

Try giving yourself a budget for the week. Know that you only have, say twenty bucks, to spend online that week. As you surf through your regular online shopping sites, it will be a little easier to resist purchasing things you would only buy on a whim (like chopstick trainers) because you know you will probably find something else you will actually want and use later on in the week. And, if you end up with ten “I want” items successfully purchase only one, you will later realize that everything else really isn’t as cool once the crazed rush of online shopping fever wears off.

Step by Step

If you know giving yourself a budget just won’t work, try cutting down a step at a time. Set a goal to resist one purchase per week. Another trick is to allow yourself to put everything you want into your online cart, but then don’t actually complete the transaction. Somehow, seeing those images in your cart makes them feel like they already belong to you, but you don’t actually spend the money. Then, once the fever wears off, you can empty them from your cart, no harm done!

Outside Motivation

Another useful method is pairing up your goal of overcoming your online shopping addiction with another goal. Turn shopping from a regular activity to a reward. For example, maybe you are terrible at exercising. So, for every two days you exercise you can buy one thing online. Once you start getting really good at exercising, switch to another bad habit that needs changing or good habit you want to develop. You’ll be killing two birds with one stone!

Ask for Help

If you simply don’t have the will power to follow any of the above suggestions, ask for help. Tell a family member or roommate to keep an eye on you. Try your best to tell a friend before you purchase anything and they can help talk you out of it. Talk through purchases and they will help you decided if you should or should not buy. This will help you regain perspective and learn what is good to buy and what is not. You can even make a deal with a friend to make overcoming this challenge beneficial for you both. You won’t shop if they won’t sleep in past eleven. Help each other overcome your individual challenges and strengthen your relationship as you do! Win-win!

Switch Addictions

If you find yourself addicted to shopping online, then the chances are you have an addictive personality. For people who have addictive personalities, oftentimes the best way to overcome a negative addiction is to replace it with a positive addiction. For example you could replace the negative addiction to spending money online with the positive addiction of budgeting your money. Oftentimes you can get the same “high” from shopping by seeing the amount you owe on credit cards or cash advances going down as you work towards paying them off. If you are addicted to shopping online specifically, you could set up your banking so that it’s done online, so you have some place to go and look at your account balances instead of going to your favorite online boutiques to shop.

So try these tips (or any variation thereof) and kick that nasty shopping habit!

How to Keep Financial Resolutions to this New Year

Many people are throwing down New Year’s resolutions that are honestly, not going to stick. Why is that? Well the major reason is that they are far too vague and oftentimes overwhelming. One of the most common New Year’s resolutions that doesn’t stick is to save money. While this may be a very vague and daunting task, you can make it happen by following these simple tips.

Budget

Budgeting is essential if you want to track your money and it makes doing your taxes at the end of the year much more doable. Make sure you are doing your best to keep an accurate record of all your debits and credits this year and you will have a better idea on where your money is going. The fact is that you can’t know where to save if you don’t know where your money is going. That is why tracking everything is so important. There are several budgeting apps for IOS and Android that can help you track your budget this year.

Avoid Late Fees

While it may seem simple enough, there are hundreds of people out there who are paying late fees for the silliest things. Late fees on library books, credit card payments, rent, and a hundred other things can be avoided through proper planning and scheduling. With all of the modern conveniences available at our finger tips it is absurd to think that people are losing so much money just by not getting things done by deadline. Make it a habit to put things in your schedule as soon as they come up so you don’t forget. Also, know how much you’re getting charged for late fee’s as well as overdraft fees, oftentimes it can be cheaper to get a cash advance for a short period of time to avoid costly overdraft fees.

Small and Simple

You have to start somewhere and if you are looking to save, you probably should start with the simple things like going out to eat or watching movies every Saturday night. There are a lot of ways that you can save money on simple things like groceries as well. It just takes a little ingenuity and initiative to get everything started.

Get Debt Out of the Way

While it may seem like a good idea to save up for your next trip to Europe, you should probably start looking at ways to get out of debt while you are saving up. Every little bit helps and pretty soon you will see the debt slowly easing off of your shoulders.

Simplify

When it comes to saving money, the best way is to simplify your life. There are a lot of things that you don’t need and there are even more things that you don’t use. Ultimately if you keep track of all these things and try and eliminate as many of them as possible from your life, you will find that you are saving much more than you thought possible in the beginning.

Make sure that you are taking care of your finances by following these simple tasks. It may seem like a lot of work but when you take it one step at a time, you will find that you are much more capable of reaching your financial goals in the end.

How to Make Money Work for You

Money can be a very slippery substance and if you don’t know what to do with it, someone else will. It takes decisive action to fight the urge to become a slave to money and eventually make money work for you. Here are some crucial steps to making money work for you.

Minimize Expenses

The old saying “a penny saved is a penny earned” is no less true today as it was back in Benjamin Franklin’s day. That means that if you really want to keep a hold of your finances, you really need to make sure that you are spending everything the second you get an extra dollar. It takes proper planning and good strategic thinking to really minimize your expenses. Resourcefulness is a major thing to think about because when we are talking about minimizing your expenses we aren’t suggesting that you go without completely, but that you are using what you have to supplement some of those additional expenses. This can be an affordable way to go about things.

Keep at least 10%

As a rule of thumb, make sure that you are keeping at least 10% of your earnings. There are so many people that just live for the here and the now. This is great if you want to be like the grasshopper that never saved up for the winter. If you are industrious and are willing to save a little here and there, you will be much better off in the end. Not only will you be better off, but you will also be in a better position to help the people that you love.

Passive income

When you have a steady cash flow and good savings it is time to start thinking about passive income. This is where money is generated from sources that may take a little capital to start but will continue to build up over time to create a stream of income in the long run. Stocks and Bonds are good examples and so are properties that you rent out. These will help you build on that income.

Increase your salary

Whether it means that you step up your game so you can get that raise, or just making adjustments so that you can have a side business to bring in a little extra money on the side, it is a good idea to increase your salary. When you go asking for a raise, make sure that you are adding value to the company overall. There are a lot of ways that can approach your boss to make sure that you secure that raise in the end, but one of the most effective is to come up with a game plan so you are progressing towards a goal and you can clearly state that there has been value added.

It is all about you in the end. It takes an individual who is ready to take responsibility and initiative in order to make money work for them. If you follow these simple steps, you will find that you are in a much better position to have money on your side!

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