Everyone wants a comfortable life with few worries. It is not something that comes without a little effort for the vast majority, and one of the things that leads to stress and general unhappiness is debt. It is important in itself but if it also results in your failing to pay your bills on time that will almost certainly harm your credit score and hence your ability to get approved for credit.
Real estate has been a traditional way to build up assets, so if you are unable to raise a mortgage that is a further obstacle to your securing your financial future.
Debt is difficult to get rid of without some serious thought and planning, yet it is the easiest thing in the world to accumulate. Do you remember when you got your first credit card? Too many of us spent immediately and didn’t pay the statement amount in full when it came to the end of the month! Did that include you?
Obviously those on fairly low wages find it difficult to live as they would like. This does not mean that with proper thought and discipline, most people can’t do a better job than they are doing at present. The level of debt in the US is truly disturbing. It would be lower if more people were following some fairly basic rules.
Keep a Budget
There are far too many people who spend money as they get it. Often they have no idea whether another bill will arrive the next day. If you think that is not possible you might be surprised. There was been a recent Gallup poll that suggests that two out of three Americans have no household budget to control their lives.
They often run out of money before the end of the month and desperately need their pay check to arrive. If they were to keep track of their regular spending in a column and total it up, missing nothing out, they might suddenly see where their problems lie.
If you are in debt, your goal is to become debt-free. That is general but you must be more specific in deciding on a realistic date when it might be possible to achieve that. It is unlikely to be overnight and you will need to think about the steps you will need to take to achieve your goal. If your goals are broken down into smaller pieces, then every time you achieve a single goal it will give you a boost towards your overall aim.
You will have to know the dates when you have to meet your regular bills as a minimum if you are to succeed. At times there appears to be little urgency in the minds of many Americans – many are resigned to the fact that they will never be entirely free of debt. In that mindset it is unlikely that they will become debt-free because they probably lack the determination required.
In these days of online spending a credit card is almost essential, especially in the travel sector where the best way to book flights and accommodation is by using a card. However the problem with cards is one of temptation. You can spend up to your credit limit and don’t actually have to pay off the full amount on your monthly statement but therein lies the issue.
If you begin to build up a balance then you will be paying a high rate of interest on that balance which may become core debt.
While you may be able to negotiate with a credit card company if you go instead to online lenders and get a personal loan, you will get a much lower rate of interest so use the loan to pay off your credit card balance and ensure you don’t build one up again.
The Correct Priorities
Material things are fine but they should not be ends in themselves. If you cannot afford to change your car then don’t do it. Housing is obviously essential but you must only spend what you can afford. You need to resist the temptation to overstretch yourself to keep up with friends or neighbors.
© 2016, Khaleef “Fat Guy” Crumbley. All rights reserved.