Make a Debt Free Life
Believe it or not there are actually some people who go through life without debt. Clearly someone born into a rich family has a better chance of achieving that than someone in need of help with their education and a mortgage to buy their first piece of real estate. There is plenty of advice about getting rid of debt, reducing spending and saving. Those who have a certain amount of manageable debt will find it easier to become debt-free than those with student loans, credit card balances. Whatever your personal situation you need to choose the path to a financially secure future that best suits you bearing in mind that everyone has a weakness or two.
One worrying statistic published by the Urban Institute says that 35% of American adults has a report in debt collection. In order to have been reported thus someone must have a debt that does not relate to mortgages which is at least 180 days late. Typically that will be a credit card balance or medical bill. That does not mean being completely debt-free because the vast majority of graduates have made or will need to get student loans $5000 instant or no bank account or from local bank to fund their education. That can be regarded as positive debt because graduates have a much better chance of a rewarding career than those leaving education early.
Build your Savings With Student Loans
This is not easy and certainly requires thought and self-discipline. If you have no savings you will have no sensible means of meeting an emergency such as a medical bill or an urgent job are the house. The alternative to having the money to meet unexpected bills is something like a credit card but given you are unlikely to be able to pay the bill in full when the monthly statement arrives you will then incur a high rate of interest applied with further amounts added until you can settle the bill totally.
Similarly if you cannot build up savings you are unlikely to be providing for your retirement, no matter how distant it is. The sooner you begin to plan for retirement the more likely it will be comfortable when it arrives.
Credit cards are very convenient and are virtually the only way that you can buy travel and accommodation. The problem is that their use is out of control. Those with credit card balances in the USA are carrying forward a figure in excess of $15,000. They are wasting their money and probably struggling to pay their monthly bills.
There is nothing wrong with taking the convenience; it is the temptation that seems to have taken hold however. Too many people are buying things they cannot afford because they are within the agreed credit limit. It won't last forever and there are fewer companies willing to extend personal credit limits if the user appears to be in trouble. That has the potential of toxic debt, the thing that caused the recent recession.
If you use a credit card pay off the complete total on the monthly statement every time.
You should concentrate on reliability when it comes to your car. There is no need for a new auto regularly, other than for your ego. What value do you put on your ego? Is that value more important than being able to meet your current bills and plan your future? It shouldn't be!
It is not essential to go to an expensive college. Accommodation can be a significant expense for students who leave home and travel to another city. Community colleges are perfectly fine until the later stages of education and they should certainly be utilized until they no longer fit the bill. The level of student debt is worrying even if education is so important in getting a good career on the move.
In one way paying rent is a waste yet it may be the best way to proceed. You do not need to pay too much rent just to have a more prestigious address. Real estate is a good investment but you should perhaps save towards a deposit for a modest home? Patience is important but as long as you are managing your finances sensibly that patience will be rewarded.
It is worth thinking about your overall spending, even down to your weekly household shopping. If you can resist impulse buying and that includes household shopping then you will save money. If you write down your shopping lists and stick to them you will have more money in your pocket. The larger items that tempt you can save you even more if you resist them until you can afford them.
There are no major sacrifices in managing your money sensibly. Everyone wants a nice car and exotic holidays but it is foolish to go for them when you simply cannot afford them. If you have self-discipline and determination, who knows? These are things that will help you on your chosen career path anyway and the day may come when these things are eminently affordable and you will have taken no risks to get themRead more Comments