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My Current Financial Situation and Financial Plan

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Words: 1700 |

Pages: 4|

9 min read

Published: Mar 28, 2019

Words: 1700|Pages: 4|9 min read

Published: Mar 28, 2019

My financial situation is not stable right now. My mother sends me money every month so I can cover my expenses and buy whatever I need. I don’t have that much of monthly expenses, mostly my phone bill expenses, groceries, clothing. I don’t have any debts. I use only the money that I have in my pocket.

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Chase bank doesn’t require a lot to open an account. They afford student account for students like me to make it easier for us. To open a student account all that you need is an issued government ID or passport and for international students, they require I-20 document. The student account you are not required to pay an annual fee. To open a saving account it’s the same procedure. Their average of interest for savings and account is 0.03% but you have to have at least $300 in the account or you will be charged $10 each month you don’t have the required amount of money. I do need both of them. Also, I have both of them.

I currently have no credit card but I’m planning on having one in the near future. The credit card benefits are building a credit score. A good credit score will allow you to lease, rent, buy or take a loan so easily. You get more protection if you pay with a credit card rather than using a debit card. Also, a credit card allows you to buy anything you want and you can’t afford it at that moment, you use your credit and pay it at the end of the month. Credit reporting agency and based on the information that they have on consumers, they come up with a credit score. When a consumer applies for a loan, be it a house, car, a credit card, a personal loan from a bank and so on, the lender requests information from companies like Equifax, Experian, and TransUnion. The agency will then send over the credit report and credit score to the lender. Based on that credit history the lender can then make a decision to give you a loan, or not give you one, and what your interest rate will be. The Fair Isaac Corporation (FICO) is another major company in the credit industry. FICO developed and maintains the FICO credit score, but it is not a credit agency. Although FICO compiles credit scores based on data from the major credit bureaus, they do not collect credit report data on their own. Finally, Credit can affect hardly your financial future. If you start with a bad credit it may be hard and take longer to fix it.

Having an insurance, it’s really important for any person especially for people in the US. There are different types of insurance. There is life insurance, health insurance, homeowners’ insurance, car insurance… etc. Personally, the most important insurance is health insurance. Basically, health insurance covers your health expenses, for example, doctor visits or medicines. Life insurance is a contract between an insurance policy holder and an insurer, where the insurer promises to pay a designated beneficiary a sum of money in exchange for a premium, upon the death of an insured person. Car insurance covers any accidents or any damage that occurs in your car. The cost of insurance varies on the person monthly income, age, and assets.

There are various types of car ownership. If you are planning on getting a car, you can either lease it or buy it. Either way had advantages and disadvantages. The main benefit of leasing a car is that it allows you go get a car for a certain number of month and after that, you can either return the car or buy it. Also, leasing a car you get to pay fewer sales tax and the warranties last the length of the lease and cover maintenance costs.

One possible drawback is that you lose car freedom with a lease. Expect the dealer to charge you for each extra mile that you use to pass the limits. Also, to break the lease it costs and the dealer may ask for more car insurance.

If you decide to buy a car you can either chose to buy it by cash which you pay the whole amount immediately or you chose to use financing. The advantages of buying a car are that you don’t have to worry about annual limits of mileage you can drive, nor do you have to fork over dollars as a fee for damage such as upholstery stains or paint scratches. Also, you can sell your car at any time without penalty. In addition, as you pay down your loan, you build equity in your car, which you can turn into a down payment on new wheels.

Despite this, buying a car with credit or cash has some disadvantages too. If you buy a car, you pay for the entire worth of the vehicle, unlike when you lease. That means you get less car per dollar of your monthly payment than you’d get if you lease. If you do decide to keep your car for a while, you’ll have to factor in repair costs once your warranty expires. When you’re ready to sell your car for a newer model, you’ll also have to deal with the hassle of selling or trading it in. Plus, cars depreciate in value, making them a poor long-term investment.

In my case, if I will ever get a car. I will choose to lease it, simply because its advantages are more convenient for my situation. To buy a car first, you have to the thing about your financial situation. What type of payment you planning to choose and finally which dealer you want to deal with.

In the US, there are different types of house ownership options. The first common one is Tenancy in Common. This kind of simultaneous proprietorship is utilized with at least two gatherings in which each gathering has an unmistakable, independently transferable intrigue. The second one is Joint Tenancy with the right of survivorship. This type of possession exchanges proprietorship starting with one gathering then onto the next upon death. Any at least two gatherings can go into this kind of possession when they need to keep the responsibility for property between those gatherings. This is basically the same as tenure in the same way as the extra advantage of survivorship. The last one is Tenancy by the Entirety. This technique for holding title must be utilized by life partners or customary law accomplices and just on the main living place. With this type of possession, the property is consequently exchanged to a surviving life partner or accomplice upon the demise of the other life partner however it has the extra advantage of shielding your property against loan bosses from either companion.

FHA is a government program for first time home buyers. This program offers a 30-year fixed-rate FHA mortgage combined with down-payment assistance. Borrowers must contribute at least 1 percent of the loan amount towards the down payment; the other 2.5 percent can come from down payment assistance or other acceptable FHA sources. Borrowers must have a job, good credit and meet income and purchase price limits, and there is a minimum 640 FICO score required.

To buy a house you need to think first about what type of house you planning to get. Also, how are you planning to pay for that house with cash or credit? Personally, I would prefer getting a house when I’ll have a stable income, which I’m going to get a mortgage of FHA because it’s very helpful in terms of requirements. To get the house I want I might have to make a 3.5% down payment which in most places $417.000 on a 30-year fixed rate mortgage.

Investing is buying assets such as stocks, bonds, mutual funds or real estate with the expectation that your investment will make money for you. Investments usually are selected to achieve long-term goals. When you invest you have a greater chance of losing money than when you save. Saving is setting aside the money you don’t spend now for emergencies or for a future purchase. It’s money you want to be able to access quickly, with little or no risk, and with the least amount of taxes. If you are planning to invest you can invest in stocks, bonds or mutual funds. The difference between these three is that getting stocks it’s like you buy a piece of the company. So, if the company does well you do well too. Getting bonds, it’s like you lend money to the government or to a company, and in return, they pay you interests for lending them your money. Last, Mutual funds represent another way to invest in stocks, bond, or cash alternatives. You can think of a mutual fund like a basket of stocks or bonds. Basically, your money is pooled, along with the money of other investors, into a fund, which then invests in certain securities according to a stated investment strategy.

My plan for retirement is to start saving right after leaving college. After, years of saving then I’ll get to invest in either stocks or bonds. All that will make my money grow fast.

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My main goal for the future is to be wealthy. To get to what I want, I’ll have to start saving at an early age which I will have more savings in the future. After saving money, I want to invest either in bonds or stock. I will probably invest in both. I want to have different sources of income. I’m planning on getting a credit card as soon as I leave college to be able to build a good credit score so I’ll be able to lease a car in the future if I need it or to buy a house using a mortgage. I plan to get a house in 10 years from now. Also, I want to start my own business while I’m working somewhere else. I’ll have to take out a loan to start my business. I determined how to achieve these goals by attending this class. It helped me a lot to assess my goals.

Works Cited

  1. Chase. (n.d.). Student Checking. Chase Bank.
  2. Credit.com. (n.d.). What is a Credit Reporting Agency?
  3. Equifax. (n.d.). About Equifax.
  4. Experian. (n.d.). What is Experian? https://www.experian.com/about-experian/index.html
  5. FICO. (n.d.). About FICO.
  6. HealthCare.gov. (n.d.). Health insurance basics. https://www.healthcare.gov/using-marketplace-coverage/getting-started-with-health-insurance/health-insurance-basics/
  7. Investopedia. (2022, March 31). The Pros and Cons of Leasing vs. Buying a Car.
  8. Investopedia. (2022, April 6). Tenancy in Common (TIC).
  9. Policygenius. (n.d.). How life insurance works. https://www.policygenius.com/life-insurance/how-life-insurance-works/
  10. ValuePenguin. (n.d.). How Much Does Car Insurance Cost?
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My Current Financial Situation and Financial Plan. (2019, March 27). GradesFixer. Retrieved April 13, 2024, from https://gradesfixer.com/free-essay-examples/my-current-cinancial-situation-and-financial-plan/
“My Current Financial Situation and Financial Plan.” GradesFixer, 27 Mar. 2019, gradesfixer.com/free-essay-examples/my-current-cinancial-situation-and-financial-plan/
My Current Financial Situation and Financial Plan. [online]. Available at: <https://gradesfixer.com/free-essay-examples/my-current-cinancial-situation-and-financial-plan/> [Accessed 13 Apr. 2024].
My Current Financial Situation and Financial Plan [Internet]. GradesFixer. 2019 Mar 27 [cited 2024 Apr 13]. Available from: https://gradesfixer.com/free-essay-examples/my-current-cinancial-situation-and-financial-plan/
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