The desire to “keep up with the Jones’s” has become more than a social status issue for many people. Also, it is very easy to get caught up in this during the holiday season. It has become a catalyst for overspending that has consumers running to banks and other lenders looking for ways to finance their purchases. This issue also has countless consumers loaded up with credit card debt so steep it may take them a lifetime to get out of it.
Give your financial literacy a good double-check, and if you are not already practicing the following financial practices, now is a great time to start today:
- Pay bills on time and balance your check book each month. You can’t know how much you can afford to spend if you don’t know how much you currently have to spend.
- Stop buying on impulse. If you want something, rather than charging it on your credit card and paying interest, save for the next few month and buy it when you have the money.
- Always pay more than your minimum balance on credit cards: Get rid of them as soon as possible. You will save money on interest and have more to save for the future.
- Vow to maintain only “good” debt. This is the type of debt that will increase your net worth: A mortgage on an affordable home, a car loan, or college debt. These will either increase your creditworthiness or make you more employable so you are able to earn more and keep debt to a minimum.
- Always include some savings in your budget. Many short-sighted people are unable to see their needs after retirement and don’t save. This results in financial difficulty during their declining years.
- Find out what you don’t know about finances—and learn it. Despite the flood of information on financial management, people don’t take the time to learn.
Finally, in order to put a stop to this financial madness keep in mind the media pull for spending and don’t be drawn into the hype. By being savvy shoppers and savers, the overspending and debt can stop.