The average debt amount owned by families (age 35 to 65) is from $65,000 up to $108,000. It is crazy that some people over the age of 65 still have debt obligations.
Avoiding such a situation is possible and doable, but you would need to find the most suitable strategy for paying off your debt.
For example, debt consolidation could be beneficial in a situation when you have different loans, and you are barely making your monthly payments. Then you will be able to make your payments on time, but also you can even be able to save a certain amount of money each month.
Avoid credit card debt
One of the commonly misused, not to say abuse, financial instruments is the credit cards…
Credit cards are one of the most expensive financial products (for you) offered by financial institutions. They are rather easy to get and even easier to max them out.
It’s not uncommon for someone 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 massive $8,284.
Imagine the cost of these families if you consider that financial institutions can charge an interest rate from 10% and upwards. It’s crazy.
For instance, in Britain, credit card holders can pay 24% (APR) for the outstanding balance. Not paying on time the minimum monthly payments on your credit card could result in an even higher cost. In some countries, the penalty rate can reach 29.99%.
Savings opportunities and planning for the future
When you have money aside (savings), you can invest this money in various types of investments. For example, you can be inspired by my personal investment portfolio and read more about the opportunities.
Investing your money can help you over time. It can increase the total income and improve your financial situation. Furthermore, it can help you reach your life goals and be a part of your long-term “retirement” 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 foremost priority is to live our lives, have fun, travel, and enjoy everything life has to offer. Afterward, our priority would be to get married and enjoy the beauties of the married life. At some point in our lives, we will need to start planning for retirement.
If you don’t plan for your retirement, you could be faced with low-income levels. Moreover, you will have to give up much of the pleasures which you had during high-income periods. Therefore, personal finance is important because it will enable 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 could even retire earlier and enjoy your life to the fullest.
It’s a matter of taking charge of your own life and use your earned money wisely as the tool to enjoy life to the fullest.