Until this time, people still seem to lack financial literacy. This leads them to deep debts, debts that are difficult to manage and overcome. While in Europe the credit card debt culture seems to be lower, Americans seem to be at the bottom of the money stash. Even worse, they seem to be in debts they are unable to pay. Since this type of money can be easily accessed, many took advantage of it, and ended up with enormous amounts due to pay. Below we have some pieces of advice in terms of money management. And the lack of it.
Create a savings account
The number of Americans without a cent in savings is continuously increasing, and this is worrying. Given the fact that financial literacy is not something acquired by many, it seems unnecessary for those to create a savings account and supply it with a fixed amount, monthly. When people lack this type of savings, they let themselves vulnerable to sudden changes such as illness or the loss of a job. In order to become more accustomed to good financial discipline, specialists recommend transferring into a savings account at least 10% of your salary or household income, monthly. In time, the amount of money that you managed to save will increase and this will consolidate your position and financial security in a rather unstable socio-economic environment.
Don’t buy more than you can afford
Yes, it’s difficult to resist all those great deals. But have you ever thought that you don’t necessarily need all those items you find for sale on a monthly, even weekly basis? You should, because when you have a credit card, you will be tempted to buy more and more, with money which you don’t own, on the account of an ever-growing debt. Avoid buying more than you can afford, and even if you have a credit card, it should be used only in emergency cases, after you have used all your savings. It should be a last resort solution.
Not taking action soon enough
Many people seem to forget that they must pay off their debts. And many seem to take action and opt for a credit card consolidation loan too late. If you recognize the following as determinant factors of your personal situation, you should definitely take action.
- Low credit score;
- Credit cards are near their bottom limit;
- You pay the minimum monthly amount required;
- You don’t have the financial means to save for an emergency account.
Well, if you see these things in yourself, it may be the case to discuss your situation with a dedicated company and see what your options are. These consolidation plans come with several advantages, maybe one of the most important being the fact that you will only have to pay interests to a single bank and avoid making multiple payments on a monthly basis. This will happen because the company that is managing your consolidation process will take in their name all your debt and refinance it, and you will only end up paying them.
These are some simple starting pieces of advice that everybody should follow in order to have a great financial status.
Article by Stephen Marshal