Sometimes in life, unpredictable things happen. You might have unexpected car repairs or even health problems. Not everyone has an emergency fund, even if they do sometimes it’s not enough. You can accumulate credit card debt very easily. Just a few unexpected things happening and you can rack up some serious debt.
You know that when it rains it pours. It’s rarely never one thing that goes wrong. It’s always a series of unfortunate things. One year, my refrigerator broke completely and my heat went out within a couple months of each other. Thankfully, the heat was a quick fix but the refrigerator was a goner. This all happened a couple months after I had major surgery to remove a huge cyst, with very expensive hospital bills.
Another reason you might have credit card debt is poor planning. Young adults don’t always understand the power and dangers of having credit cards. Young adults with credit cards may not always teach young adults about finances until they are older. It can be easy to just not think about how much money you are really spending because you don’t see it come out of your wallet or bank account.
I know when I was a teenager, I signed up for one of those cd clubs where you received eight CDs for a penny. I didn’t fully understand the fine print at 18. Let’s just say those CDs ended up costing me more than a penny in the long run. Credit card promotions are a great way to get people to sign up but it can also be dangerous if you don’t have good self control. You can get in trouble quickly. I feel like they didn’t teach the dangers of having a credit card in school and interest rates.
The good news is you can always do something about it. It’s usually not financial ruin. You can hire a company like Pennon Partners who help their clients prioritize their clients needs by offering single monthly payments with a low interest rate. This way you can have one payment instead of several with different interest rates. Having a lot of different interest rates can really add up. Sometimes it can make you go deeper in debt.
Here’s several good tips to avoid debt:
Try not to live above your means. You may have a taste for the finer things but if you can’t afford it, save for it. This also cuts down on impulse buys.
Use the envelope method and have a different envelope for each expense. Ideas are housing payment, food, entertainment, and extras. This way you know exactly how much money you have on hand. Once it’s gone it’s gone.
Avoid using your credit cards unless you have to. Pay off cards and then close the accounts so you don’t have the temptation of overspending.
It’s never too early to teach your children about money. Giving your children an allowance, helps them learn how to be financially responsible. It also teaches them about once the money is gone, it’s gone.
Open a savings account. Have a set amount taken out each month and transferred in to your savings account for emergencies and rainy days. It can be whatever amount you feel comfortable with. By having it come out automatically, you don’t even have to think about it or do anything. You can also use this savings account for vacations.
No comments:
Post a Comment