Are You On the Express Lane to Debt? – Part 2
Are you a Financial Slob?
There is no question thatpersonal financial matters can be complicated and require your attention and focus. If you are borrowing money and you don't understand the terms and repayment conditions you are setting yourself up for disaster. You hear that old saw, "You should have read the fine print!" for a very valid reason.
Finances tend to be complicated and require some mental manipulation of the most dreaded of all things -numbers. Failure to pay attention to loan terms and due dates can have severe consequences to the numbers left in your bank account.
A survey forBankrate.com's Financial Literacy revealed some astounding information.
1. 34 percent of homeowners had no idea what type of mortgage they had whether it had a fixed or adjustable rate!
2. 61 percent say it's very important to shop around for the best insurance quotes and coverage, but just 39 percent actually do it.
3. 54 percent say it's very important to adjust the W-4 form annually to make sure the correct amount is being withheld from their paychecks for income taxes, but just 38 percent do it. And 44 percent believe that it's very important to check their credit report annually for accuracy, but only 30 percent do it.
Americansare fairlyadept at taking care of the basic stuff such as paying bills on time and avoiding late charges. But they aren't nearly as good at handling moretedioustasks such as evaluating insurance, shopping around for a better interest rate on bank credit cards, or checking credit reports and scores. It is fairly easy to put off, or even be unaware of the need to look at certain aspects ofyour financiallife until it is already too late and some fairly nasty damage has been done to your credit and your peace of mind.
A sensible 93 percent of Americanssay it is very important to pay bills on time to avoid late fees. And 80 percent say they always pay their bills on time. Some 17 percent say they sometimes pay their bills on time. The people in the later category are the people who will wind up owing or paying a lot of money in late fees, increased interest rates, bank fees, overdraft fees and so much more. This type of poor money management has far reaching implications and can cause employers not to hire a person who cannot handle their personal finances, cause insurance and mortgage companies to either decline an application or charge such high interest rates and fees that it causes further financial burdens.
What to do?
Plan your purchases and don't let greedy eyes overtake your wallet with a lust for luxuries you cannot at this moment afford. If you have budgeted$1,000for an itemdon't talk yourself into spending just a little more than that because it seems easy to just pay for it as you go. If you don't have another $100 to add on to that $1000, take a deep breath, walk away and come back when you do have the money. Lack of discipline when purchasing quickly adds up to pushing up your debt levels and blowing your budget.
Lastly don't forget to take advantage of any financial advantages offered by your job or that you can construct as part of your business, such as 401K's and other tax deferred offerings. Not taking advantages could make you a financial slob!
There will be more on this topic later in the series. To read part one of this series, please click
here.
Are You On the Express Lane to Debt? Part 2
By: Theodore Henderson
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