People who are living day by day from a financial point of view rarely have the chance to relax and enjoy themselves. There are of course people who struggle to pay their bills simply because they have not got much money coming in. Others struggle because although they have decent income they have never been good at money management. It is worth trying to learn more because in later life, if they have not saved for retirement, life will be less than comfortable.
The poor and disadvantaged can only hope that the Social Security System will be their lifeline. It is looking increasingly vulnerable however with fewer people paying in and more people claiming as people live longer. Those with regular incomes should not rely on that System in the future, they should try to reduce their debt as a matter of urgency and begin to save.
Pay Off Debt with a Loan
Getting rid of debt is rarely simple but if you are in full time employment and getting a regular monthly pay check then you should be able to get a loan if an online lender believes from the information you provide that you can afford it and will make full repayment within the agreed term. That involves realism on the applicant’s part of course. The rate of interest applied to a personal loan is far lower than that the credit card companies add to outstanding credit card balances. Start your new financial life by paying those balances off with a personal loan and don’t use your credit card irresponsibly again.
Saving Alternatives
What about saving? Well the money you are saving each month by not paying high interest on a credit card balance is a start! Preparing a budget is a good start then determining to follow it comes a close second. It must obviously show a surplus for you to be able to save.
A 401K allowing you to contribute gross income into a retirement account is essential. If your employer will match your contributions all the better. Perhaps think about 5% gross and see how you manage. You may be some way from being able to invest in the markets. The S&P 500 is likely to provide good guaranteed growth with absolute minimal risk but first you must reach the stage when you have the money to invest.
The real estate market during the recession was problematic but property is still an excellent medium to long term way of building up your assets. You will need a good credit score to get a competitive mortgage and a deposit as well but you should have the aim of achieving both.
Delay Benefits
Few people want to continue to work after retirement age but some have no option. If you can delay drawing from the Social Security System for as long as possible, 70 being the latest date, your benefits will be much better than if you take them at the earliest date, 62, as 40% of the population appear to be doing.
If you are sitting at home thinking how you can possibly get to a point when you can take advantage of these saving ideas then it may seem quite a task. What you shouldn’t do is nothing because you feel the situation is hopeless. It may well be a slow process and the task is harder the later on in years that you are. If you are still young you must resist the temptation to do nothing because retirement is so far away.
A Little Is a Good Start
So what is the minimum you should do and what are the priorities? Well paying off credit card is an excellent start because interest is so high. You should then use your card or cards purely for convenience in the future and only for things that you can afford and pay off in full at the end of the month.
You should also try to economize and look for cheaper sources of utilities, insurance and even telephone network provider. Do that exercise and look at how your monthly circumstances have improved. That should be encouragement to do more. While it may take time who is to say that the other saving ideas will be unattainable?
