You’re going somewhere, but is ‘somewhere’ really where you want to be? Life is a journey and managing your money effectively helps it become magnificent. Effective financial planning is the means by which you craft a journey towards a known destination and then make adjustments along the way. We know it can be challenging. We’re a Charleston Financial Planner and we want to help you define your ‘somewhere’ and then chart a course to get there. Let’s talk today!
Understanding a Car Lease
Purchasing a car is a sizeable financial decision that requires extensive thought and research. An alternative option to buying is leasing, but there are pros and cons to both choices. Understanding a car lease can by difficult and although the basic premise of a lease appears straight forward, there are many underlying complexities that can be deceiving to most people. Let’s dive into this debated topic in order to help you make a decision that’s best for you.
Leasing is just like renting; you pay each month to use the vehicle and do not own the car at the end of the contract. You’re obligated to fulfill your entire lease unless you’re willing to fork over a hefty early termination fee. Plus, you’re still required to perform necessary upkeep to the vehicle such as oil changes. These maintenance fees will usually be minimal during the length of your lease and most cars are still under warranties that cover major repairs. In addition to regular upkeep, you’re also held responsible for excessive wear and tear. At the end of your lease, if the dealership finds any damages that are more than normal wear, then you are responsible to pay extra charges.
The biggest limitation to any lease is the mileage cap. The average length of a car lease extends three years allowing 36,000 miles of driving throughout those years. If you exceed this mileage cap, there is a cost per mile for each mile you are over the limit. This cost is usually around 15 cents per mile. In most cases, you are able to arrange a lease with higher mileage with the dealership, but it will result in more expensive monthly payments.
Although many of these limitations may sound overwhelming, remember that you shouldn’t be afraid to negotiate! Contrary to what some people believe, leasing prices are not set in stone and are not the same at all dealerships. The key to understanding a car lease is shopping around and doing your research – SEE INSIDER TIP BELOW. This will give you the upper hand when negotiating, because the salesperson will know you have other (and possibly better) options. Approaching a lease using these tactics will help you get the best leasing option available.
INSIDER TIP: Shop for a Lease Based on Residual Value
- Residual value = the price at which you can buy the car at the end of the lease
- Residual value directly affects month payment cost
- Higher residual value = lower monthly payments
- Ultimately, lease a vehicle that holds its value
Although, leasing a car is the least expensive option in the short run with lower down payments and monthly costs, it is not the best choice for everyone. Consider your type of lifestyle when making this decision. For example, do you drive an hour to work every day or do you have young children that may damage the car’s interior? In these cases, leasing a vehicle may not be for you, but just remember to do your research and never be afraid to negotiate to ensure that you get the best deal possible. We’re a Johns Island Financial Advisor and are here to help you analyze your lifestyle and give you confidence in your financial decisions. Please contact us today to set up a complimentary appointment and we can discuss a plan of action that satisfies your needs!
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Creating a Budget
Who says you can’t budget for your guilty pleasures? Well, we believe you can! Of course your budget may include things such as utility bills, gas, and groceries, but don’t be afraid to incorporate the fun things when creating a budget. Whether it’s a weekly case of beer or your next vacation to the Caribbean, don’t deprive yourself when it comes to your budget. It’s all about how you budget for these things, which can be difficult, but that’s why we’re here to help! Contact us today and let’s talk so we can help you create the perfect plan.
Budgeting Apps
Who says creating and maintaining your personal financial budget has to be a painful process? Sure, the mention of budgeting naturally causes us to cringe, but that doesn’t have to be the case. Tracking your income and expenses can be fun by adding animations, visually appealing graphs, and budgeting for the cool things that are on your wish list.
Now, there’s no denying that we live in an age where time is of the essence. All of us have busy lives and its nearly impossible to find the time to sort through countless receipts and manually track our spending in a tedious excel document. But, technology is the easy solution to this dilemma. We have the ability to check our email, surf the web, and stay up to date on the current news all while we’re on the go. It’s just as easy to implement that same mobility to your financial budget with the help of many easy to use budgeting apps.
Of course when you visit the app store on your phone and search for budgeting apps there are countless options to choose from. So just to help you, we’ve picked two of the top financial apps out there and analyzed each one.
First, lets start with the very popular application known as “Mint”. This program helps you create a personal budget based on your account information and spending habits. By connecting securely to your bank accounts, credit/debit cards, investment and insurance accounts, this app will automatically track your expenses and generate tips customized just for you to help cut unnecessary spending. Mint also has a fully operational website where you can link all of your accounts and then manage by use of the app. Mint also allows you to pay bills directly through the app, plus you can even check your credit score! The visually appealing graphs and charts help make budgeting fun, especially for the younger generations.
Since it is compatible with iPhone and Android operating systems as well as tablets and computers, it’s easy to manage your finances no matter where you are. Although the possibilities are endless with this app, we found the learning curve to be greater than the others we’ve worked with.
One could argue that setting up your bank account and credit card information within an application could make you uneasy. While most of these software systems use high level encryption similar to that of your bank’s online access, we certainly understand if you wonder if your financial information is truly secure. If you fall into this category, don’t lose hope in budgeting applications just yet!
Our next favorite is, “Wally”. This app might be for you if you’re apprehensive to the automated approach to budgeting. Unlike Mint, you must log your expenses manually with Wally. Although this might sound tedious, there is a cool feature in which you can input an expense by simply snapping a picture of your receipt! The app consists of a simple design that is user friendly and merely tracks income and expenses to ultimately project your savings each month.
Unfortunately, there is no tablet or computer version of Wally, so you are limited to tracking your expenses only on your smart phone. Bottom line, if you’re new to budgeting or are just looking for a simple way to monitor your spending and saving, then Wally is the budgeting app for you!
Smart phone applications are just one of the many ways to budget your finances, but ultimately you have to find a method that works best for you. Keep in mind living on a budget is simply the means by which you plan for future expenses. Budgeting can be overwhelming at first, and that’s why we want to help! Get in touch with us today so we can work with you to construct your perfect financial plan and prove that budgeting can be fun!
Image Credit: PHPLadies
Planning for Retirement
Do you think you’re too young to start planning for retirement? Well if that’s the case, then chances are you’re the perfect age! Motivating yourself to begin planning for the far future is never an easy task, but remember the sooner you start, the more time your money has to grow. We’re here to help you take the first step to begin planning for retirement, because we care about your future. We have some great tricks up our sleeves to help you plan for financial success, so let’s get started! Get in touch with us today to set up an appointment.