Nexus Credits

have a Productive week.

Being a Guarantor on someone else's loan is a big commitment. Before you agree to it, you need to weigh the pros of helping someone get a loan they might need against the cons of possibly getting stuck paying for a debt you didn't incur.

1) Understanding the Responsibility of a guarantor: When you guarantee a loan, you are pledging yourself to pay on the loan if the borrower doesn't pay. The main advantage to being a guarantor is that you can help someone else get the credit he or she needs.

2)Your Trust Level in The Borrower: While it may seem cold-hearted to evaluate your child, parent, sibling, or friend for trustworthiness, it might be necessary if you don't want to find yourself paying off someone else's debt.

3) Consider If Being A Guarantor Could Negatively Impact the Relationship: Additionally, you need to consider the impact being a guarantor might have on your relationship with the borrower. Will you be constantly nagging the borrower to make sure that he or she fulfills the obligation? What happens if the borrower defaults?

A written, monthly budget allows you to plan for how you will spend and/or save your money each month and also keep track of your spending patterns.

Gather every financial statement you can. This includes bank statements, investment accounts, recent utility bills, and any information regarding a source of income or expense. One of the keys in the budget-making process is to create a monthly average, so the more information you can dig up the better.

Record all of your sources of income. If you are self-employed or have any outside sources of income, be sure to record these as well. If your income is in the form of a regular paycheck where taxes are automatically deducted, then using the net income (or take home pay) amount is fine. Record this total income as a monthly amount.

Create a list of monthly expenses. Write down a list of all the expected expenses you plan on incurring over the course of a month.

Break expenses into two categories: fixed and variable. Fixed expenses are those that stay relatively the same each month and are required parts of your way of living. Variable expenses are the type that will change from month to month and include items such as groceries, Fuel, entertainment, eating out, and gifts, to name a few. This category will be important when making adjustments.

Total your monthly income and monthly expenses. If your end result shows more income than expenses, you are off to a good start. This means you can prioritize this excess to areas of your budget such as retirement savings or paying more on credit card balances to eliminate that debt faster. If you are showing a higher expense column than income, it means some changes will have to be made.

Make adjustments to expenses. If you have accurately identified and listed all of your expenses, the ultimate goal would be to have your income and expense columns to be equal. This means all of your income is accounted for and budgeted for a specific expense or savings goal.

Review your budget monthly. It is important to review your budget on a regular basis to make sure you are staying on track. After the first month take a minute to sit down and compare the actual expenses versus what you had created in the budget. This will show you where you did well and where you may need to improve.