Taking care of your loan as a parent can be pretty challenging, especially if you have more than one child to take care of it.
Whether they’re sick, injured or in need of something, there’s no doubt that some weeks will be harder than others to make payments on time.
In order to avoid missed payments and penalties on your loan, here are 5 tips to help you get through the tougher weeks without taking you down financially as a parent.
1) Have a good credit score
Your credit score is the number that lenders use to determine how much they are willing to lend you.
They use it because your ability and willingness to repay your loan is an important factor in their decision making process.
The higher your credit score, the less risk there is for the lender and so they will give you more money.
So if you’re looking to take out a personal or student loan, make sure your credit score is in good standing.
You can check this by contacting one of the three major credit bureaus: Experian, Equifax, or TransUnion.
They each have online tools where you can enter some information about yourself and then see what your credit rating looks like.
If you don’t know what your credit rating is, find someone who has access to these tools who would be willing to do it for you.
Once you have checked your score, work on improving it so that when the time comes to borrow money (say, for a house or car), you’ll be able to get the best rates possible from lenders.
2) Save money
Make sure you have an emergency fund. You never know when life will take a turn for the worst and you’ll need some money on hand to help tide you over.
Money can be tight as a parent, so it’s important to save at least $1,000 in your emergency fund.
And that doesn’t include any medical emergencies or costs of getting a new job. It might seem like saving that much money is impossible, but small changes can add up to big savings.
Just cutting out one latte each week could save you enough cash to reach that goal in just six months! But there are other ways to save money too.
Get rid of those cable TV subscriptions you don’t use anymore and switch over to Netflix or Hulu Plus for your streaming entertainment needs instead.
That will free up some cash every month, which is crucial when you’re trying to save money.
One of the best ways to save money as a parent is to limit how often you eat out with friends and family members; that habit alone can rack up big bucks if done regularly.
3) Pay off the loan early
Paying off your loan as soon as possible is the best way to maintain good credit, avoid additional interest and have peace of mind. Consider these five steps to paying off your loan early, Get organized.
Make a budget and stick to it by recording all income, expenses and debt payments. – Start saving for emergencies. Try saving at least $500 in an emergency fund in case something happens and you need cash fast.
Prioritize your expenses. Find out which ones are essential (e.g., mortgage or rent), then save up some extra money to pay them off first so that they don’t add any more stress on top of what’s already there.
Cut back on spending. Don’t overspend on clothes, entertainment or eating out – instead invest in those things later when you’re out of debt! If you really want to make sure your kids know how important it is to work hard and save money, give them chores around the house.
Have them help with simple tasks like taking out the garbage or setting the table. Kids will be much more likely to learn about life’s values if their parents show through example.
4) Keep track of your finances
As a parent, it can be hard to find time and energy for the financial aspects of your life.
However, if you take some time each month to make sure your finances are organized, you’ll find that the process is much smoother.
The following are five ways you can keep track of your finances as a parent
✓) Track your spending.
✓) Make sure all bills are paid on time.
✓) Compare financial goals with current income.
✓) Create a budget plan.
✓) Try to spend less than what’s in your bank account.
Doing these five things will help ensure that your debt doesn’t get out of control while you’re trying to manage being a parent.
You don’t want to end up having to make choices between paying off debts or buying groceries, so take care of both by balancing the two!
To see how quickly you’re paying down debt, divide your monthly payment by the number of months left on the loan.
For example, $200 divided by 24 months equals an average monthly payment of $8 per month ($200 divided by 12 months equals an average monthly payment of $16).
5) Know your limits
Loan debt is common in today’s society, and it can be tricky when you’re trying to balance your family responsibilities. It’s important not to let your loan debt get out of control.
Make sure you set aside some time each week or month for repayment, and don’t hesitate to call your lenders if you need help getting on the right track.
You’ll feel more confident knowing that you’re taking care of your obligations, and will have peace of mind knowing that you won’t face any penalties.
Ask yourself what’s most important: When you’re juggling everything from feeding and clothing your children to paying the bills, it might be hard to find the extra money needed for payments.
However, once you start making payments, things should get easier and easier with every payment you make.
If you ask yourself what’s most important – taking care of those things that are essential for survival – then make sacrifices where necessary until these necessities are taken care of.