When ever you need to fix something in you home, you go and look for an entrepreneur to do it for you. However concerning financial development, you need to seek knowledge from professional in financial issues.
Referring to statistics, Americans are living right on the edge — at least when it comes to financial planning. Approximately 62% of Americans have less than $1,000 in their savings accounts and 21% don’t even have a savings account, according to a new survey of more than 5,000 adults conducted this month by Google Consumer Survey for personal finance website GOBankingRates.com. “It’s worrisome that such a large percentage of Americans have so little set aside in a savings account,” says Cameron Huddleston, a personal finance analyst for the site. “They likely don’t have cash reserves to cover an emergency and will have to rely on credit, friends and family, or even their retirement accounts to cover unexpected expenses.”
What causes this situation is credit cards and debt! Debt is a critical issue in many American household. The average U.S. household with debt carries $15,675 in credit card debt and $132,158 in total debt. It’s easy to say “we should get rid of our debt and pay off our balances”. But saying it is not like doing it. It’s a though decision that takes a great commitment, personal and family teaching to get results from the hard work on how to cut off spending.
First, you need to have plan. You define the problem, you learn about it then you take it to reality, it’s a complex process. That why you need financial coaching that could teach you how to spend less than you gain. Have you ever heard the proverb saying: “Pay yourself first.” which means put your money in saving first.
To get rid of debt, our personal and family debt, we need to divide debt in two categories: credit cart, and debt with interest charges.
I’ll be presenting you This financial coaching in multiple series of teaching and coaching. I’ll be sharing with the information and knowledge that will help you solve your financial problems using smart tactics. I will explain to you how to make short and long term plans to free yourself from debt. And to use some strategies to manage your expenses upon your income . I’ll guide you toward the best understanding of the value of money and to consider it as a gift to be spent rationally. I’ll help you while teaching you how to deal with your own money.
Prior to that, let me teach you some wise philosophy of life: you have to change your opinion about money, how is that? most of people who their income let say $30.000 a year would say if it was $40.000 I would be better off. The same thinking with the ones that make $40.000, they would say , if my income were $50.000 I would live comfortably and free of debt. The problem though is not in getting more income, but in how to cut more expenses. Because no matter how huge or little your income is, you would over spend it. Indeed you have to change your vision of money. Think differently, teach yourself how to deal with money. For that purpose you might need help of professional in financing.
Before that, let ask questions about debt situation, and why debt has grown so highly in American families?
A study has shown how the cost of living has increased, and how the rise in the cost of living has outpaced income growth over the past 12 years. While median household income has grown 26% since 2003, household expenses have outpaced it significantly — with medical costs growing by 51% and food and beverage prices increasing by 37% in that same span. Household income has grown by 26% in the past 12 years, but the cost of living has gone up 29% in that time period. And some of the largest expenses for consumers — like medical care, food and housing — have significantly outpaced income growth.
household debt has grown 15% faster than household income since 2003. This is a concerning spread, however this situation has improved significantly from where it was in 2009, during the recession, when the difference reached 42%. As McQuay says “One upside to the recession is that it forced people to tighten their belts,” “While that tightening was painful at the time, it helped slow down the growth of consumer debt.”
As we conclude here, the economic crisis and the period of recession has put the American in critical condition of debt. While cutting expenses is one effective solution , there are many other ways to defeat debt by information and knowledge in financial tactics. Next articles I will go through financial fitness and how to live debt free.