Spend Some, Save More
Spending money we don’t have is a luxury given by credit cards. This small plastic enables us to experience comfort and lavish possessions we can only afford in our dreams; or if we were part of the rich and famous. New opportunities and adventures open up for us with just a swipe of the credit card. “Spend now, pay later” is a term accepted by the general public; thus making debt a normal part of of our society. However, credit cards should help bridge cash flow gaps; it is not the quickest solution to a life of luxury.
A change in lifestyle will cut the root of the problem which has been plaguing not only US citizens, but also other people from across the globe. Relying heavily on money that you haven’t earned to support a lifestyle that is not befitting your situation in life is a mistake. Instead of being able to save money based on your earnings, this money ends up with the bank to pay for the interest accumulated by your unpaid credit card debt. Drastic changes need to be done, if you have been living beyond your means; but ultimately, what you want to give up is a choice you have to make on your own. If worse comes to worst, and you are heavily indebted, a financial advisor may be able to help you.
Money in the bank is not money wasted; because you have liquid assets that will eventually help you. You don’t have to invest heavily if you can’t afford it; but having an emergency cash fund will go a long way – especially when the economy slows down or if you suddenly become unemployed. The readily available cash will also help you determine, whether or not you are earning enough for yourself and your family, as well as establish a financial structure to help you invest for retirement. Remember that having extra money is also a luxury that many people cannot afford because they are not earning enough for themselves.
If you have credit card debt, and would like to start putting money aside in the bank; you must prioritize your savings account. Settle for an amount that you would like to deposit into your bank; the money left over after you have paid for living expenses is the amount that should be used to pay for your card balance.
Some people will try and reduce their debt as quickly as possible, without thinking about saving some money that they might eventually need. With this approach, they will end up using their credit cards for emergencies because they have no fall back. Those who have some cash handy will not have to swipe their cards for the next time their car breaks down.
Becoming heavily in debt is the first step to poverty for many. The painful truth is that we don’t need credit cards to profess to the whole world that we are free and we live in lavish comfort.
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