Top 5 Most Common Finance Questions and Answers
Posted by : Premraj | Posted on : Tuesday, June 25, 2013
DELICIOUS
SU
REDDITMost people have financial concerns especially during an economic downturn. To help out we have compiled 5 of the most common finance questions and answers:
1. What steps can I take when I first start saving?
Answer: One of the first steps might be to put together a budget. You’ll need to know how much disposable money you have left each month to save comfortably. Don’t bite off too much and attempt to save more than you can easily afford, if you do so you’ll leave yourself short, and before long you’ll be tempted to dip into your fledgling saving.
2. When will interest rates begin to rise again?
Answer: It is unlikely the current interest rate will rise in the near future. The government believes that low interest rates increase the supply of money and keep inflation low. The economy needs stability at the present time and for that reason interest rates are likely to remain low. Stocks and shares offer better returns but of course there is risk attached.
3. Is foreclosure the smart thing to do?
Answer: No. The smart thing to do is avoid foreclosure as much as possible. Foreclosure has many detrimental effects. It will ruin your credit score for years to come. This will make it hard if not impossible for you to get future loans. Foreclosure and bankruptcy both will damage your credit score significantly. Going bankrupt under some circumstances will not prevent you from having to pay back all you owe. The damage to your credit rating will remain on your credit file for 6 years and possibly up 10 years.
Although housing values have dropped in recent times they will eventually start to creep up in value again. Mortgage rates are also historically low right now, so it might be worth looking into the possibility of refinancing to a lower repayment plan. If nothing can be done this is the time to look to sell and to make an arrangement with the bank if there is any debt outstanding.
For those without property and have high credit card debts, then filing for bankruptcy will keep the wolves away and it will be many years before one can borrow again. It would be better to come to an arrangement with the credit card companies. They would rather you pay something towards your debts than nothing.
4. Why does my employer want to check my credit?
Answer: Employers often make credit checks on new employees. This is often done so the employer can assess your integrity. People who are in debt are more likely to pilfer from their employer.
5.What are the differences between a 401k and a 403(b)
Answer: What is the difference between a 401k and a 403b? The answer is not a lot. Both plans are offered by employers but both may not include employer contributions. Both plans take into account pre-tax contribution up to a set yearly level. The differences between the schemes are so little that it isn’t really worth worrying about. Recent legislation has brought the two plans so close together that if you have been offered two jobs, one with 401k and the other with 403b, don’t let it influence which job you take as the differences are negligible.
We hope some of the above questions and answers will help. This list isn’t exclusive and if you need help with savings or investing you should consult a financial adviser who will help you find the best deals during these difficult times. A finance degree can also provide extensive information on these topics as well.
