Are your finances in Trouble?
It is most people’s desire to live the American Dream; to be able to buy whatever you want whenever you want it. However, the American Dream can turn into a nightmare if you’re not careful. Debt can creep up on you and take you down when you least expect it and when you’re most vulnerable.
Going into debt is not necessary in order to be able to have the things you need and want. However, it’s easy to get caught up in the trap of thinking you have to have it now, and oftentimes that means putting it on a credit card or taking out a loan.
Aside from an “I want” mentality, here are some other warning signs that you might be in danger of a lifetime of indebtedness:
Do You Have A Budget?
When you don’t have control of your money and finances, you are at risk of going into debt. A budget allows you to the freedom to tell your money where it’s going and opens the door to savings. The key to staying out of debt, yet having the freedom to purchase the things you want and need, is being able to save up for them and pay cash.
Are You Trying To Keep Up With the Jones?
When you find yourself struggling to make ends meet every month, you’re living outside your means. When you have more going out than coming in, you are more likely to be tempted to go into debt in order to get the things you need or want.
Where is Your Stash?
An emergency fund is money set aside for, well, emergencies. You should have at the very minimum $1000 set aside for emergencies. Money for food, weekends away, and routine car maintenance are not emergencies. You should have money budgeted for these things. A true emergency would be an unexpected hospitalization, a death in the family, or a car accident. When you don’t have an emergency fund and a true emergency arises, you may be forced to go into debt in order to pay hospital bills or other expenses which could mean more finances in trouble for you.
Build Your Credit But Do It Wisely!
This is probably the biggest pitfall of all where debt is concerned. Your parents and grandparents have probably taught you that you must build credit so you can have the things you want in the world. However, the truth is, you can have nice things without over doing it by using your credit cards. The “trick” is budgeting, saving and planning so that you can pay cash for items that don’t need to be charged. In some cases you don’t have to take out a loan or use a credit card, even to buy the larger items. While reading this you might find this hard to believe.
By knowing the warning signs, you can avoid the pitfalls of debt and enjoy living a debt-free life and avoid having your finances in trouble altogether.
For because of this you also pay taxes, for rulers are servants of God, devoting themselves to this very thing. Render to all what is due them: tax to whom tax is due; custom to whom custom; fear to whom fear; honor to whom honor. Owe nothing to anyone except to love one another; for he who loves his neighbor has fulfilled the law. Romans 13:6-8