The average amount of debt held by families (aged 35 to 65) ranges from $ 65,000 to $ 108,000. It’s crazy that some people over 65 still have debt.
Avoiding such a situation is possible and doable, but you will need to find the most appropriate strategy to pay off your debt.
For example, debt consolidation could be beneficial in a situation where you have different loans and are barely making your monthly payments. You will then be able to make your payments on time, but also you will even be able to save a certain amount of money every month.
Avoid credit card debt
One of the financial instruments commonly misused, not to say abused, is the credit card …
Credit cards are one of the most expensive (for you) financial products offered by financial institutions. They are quite easy to obtain and even easier to maximize.
It is not uncommon for a person to have accumulated a large amount of credit card debt. The average credit card debt balance for a family in the United States is actually $ 8,284.
Imagine the cost of these families if you consider that financial institutions can charge an interest rate of 10% and more. It’s crazy.
For example, in Great Britain, credit card holders can pay 24% (APR) for the outstanding balance. Failure to pay the minimum monthly payments on your credit card on time could result in an even higher cost. In some countries, the penalty rate may reach 29.99%.
Savings possibilities and planning for the future
When you have money set aside (savings), you can invest that money in various types of investments. For example, you can take inspiration from my personal investment portfolio and find out more about the opportunities.
Investing your money can help you over time. It can increase total income and improve your financial situation. Plus, it can help you reach your life goals and be part of your long-term âretirementâ plan.
When we are younger we tend to ignore the fact that we may need to have a sufficient level of money in the future.
Being young, we assign different priorities in our lives. In the beginning, the top priority is to live our life, have fun, travel and enjoy all that life has to offer. Afterwards, our priority would be to get married and enjoy the beauties of married life. At some point in our life we ââwill need to start planning for retirement.
If you don’t plan for your retirement, you could face low income levels. Plus, you’ll have to give up a lot of the pleasures you had during times of high income. Therefore, personal finances are important because they will allow you to understand the importance of planning for the future.
Planning for your future can also help you with the goal of becoming financially independent (just like me). You might even retire earlier and enjoy your life to the fullest.
It’s about taking charge of your life and using your earned money wisely as a tool to enjoy life to the fullest.