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Liz Weston: 8 rules for saving, borrowing and spending money | Lifestyle

6. Smartly lend to your home

If you want to be a homeowner, the best time to buy your first home is when you’re financially ready and in a position to stay for years. Choose a fixed mortgage interest rate as long as you plan to stay home and don’t make additional payments to your principal until you have paid off all your other debt and are on track to retire.

7. Buy a used car and drive for years

Buying a car right now is not a good idea. Supply chain twists and other pandemic-related issues are driving up the cost of both new and used cars. However, in general, buying a used car can save you a lot of money over the entire driving period, just as you can drive the car for years before you replace it. Nowadays, well-maintained cars can withstand 200,000 miles without major problems, according to JD Power. This means that if you drive 15,000 miles a year, you will get about 13 years of service from your car. Ideally, you would pay for the car. If you need to borrow, try to limit the loan term to a maximum of 5 years.

8. Insurance for catastrophic costs

Use insurance to protect yourself from catastrophic costs, not small costs that you can easily pay at your own expense. If you have enough savings, consider increasing your insurance deductions to save on insurance premiums. However, be aware of high deduction health insurance. High deductions can postpone medical care. When it comes to health, you should make a safety mistake.

Liz Weston: 8 rules for saving, borrowing and spending money | Lifestyle

Source link Liz Weston: 8 rules for saving, borrowing and spending money | Lifestyle

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