| In the 'good old days' people didn't use credit very often, they saved for the things they wanted. Today that's not the case. In our modern world it's virtually impossible to not incur at least a little debt. Most people could never afford to pay cash for a house or car. But if you take on too much debt and have sudden debt you could find your financial situation in jeopardy very quickly.
Americans don't save. As a matter of fact our whole society is based on debt. We are not encouraged to save we are encouraged to take on as much debt as we possibly can, stretching our budgets to very precarious limits.
Without our rainy day fund we can quickly find our financial position in jeopardy with even the smallest unexpected expense. In most cases it doesn't take a lot to capsize our financial boat.
There are a few things you can do to protect yourself from the unexpected. Here are a few things to keep in mind:
1) It's obvious, I know, but try to save more. Even a few dollars a month is better than nothing. If you save just $50 a month that is $600 a year. Continue this trend for several years and you could find yourself with a nice little nest egg.
Almost anyone can afford to save $50 a month if they're honest with themselves. Small changes such as not eating out as often and skipping that $4 cup of coffee can make a big impact, in a good way, on your budget every month.
2) Don't use credit as much. Use it for your house, your car and that's about it. For the most part if you don't have the cash to pay for something you probably don't really need it.
Before you splurge take a minute and ask yourself if carrying that debt for months or maybe even years and paying 10,20,100 times more than the actual price of the product because of all the interest charges is really worth it. If you can stop the impulse shopping you can dramatically cut your debt.
If you don't have as much debt you are better able to weather a financial storm. The people who can't make it through the storm are the ones who have no wiggle room in their budget.
Your financial future will depend on the financial decisions you make today. Do whatever you have to do to stay as debt free as possible: hide your credit cards, only go shopping when you really need something and have the cash to pay for it, don't use 'retail therapy' as a way to get out of a bad mood, and try to save at least a little every month.
Follow these simple tips so that if sudden debt happens you can come through it smelling like a rose. |