Finance 101
Unfortunately, I lost my job as a school administrator over a year ago
. Although my family has always been frugal, this put us in a tough spot. We had to make tough decisions regarding what we considered luxuries such as eating out and going to the movies. We wanted to take a vacation, our home needed new furniture and cosmetic work, and our cars were getting old. However we made the decision to cut out anything that wasn't absolutely necessary and have stuck to it throughout the entire process. Let me tell you it hasn't been without pain, but we have managed just fine and my son has become a better young man for the experience.
Remarkably, a huge segment of our population appears to have an approach which is the polar opposite. It has become a standard in the US to live beyond our means. Just glance around your neighborhood. You will see expensive homes deserted, people driving cars they can't afford just to impress, and restaurants full of people spending a fortune of a meal.
The real tragedy is that we have passed this mentality on to our children. Teenagers are driven by a need to impress classmates with clothes, cars, jewelry, phones and other technology. Statistics show that the average 17 year old will spend over $100 a week. At the same time, only forty percent of this age group has a job which pays. So apparently not only have we done a poor job of teaching our children to be fiscally responsible, we are perpetuating the problem by contributing to their spending habits.
As these children move into young adulthood, what will the result of their upbringing be? As you can probably guess, they become young adults with no idea of how to manage or save money and usually turn to credit cards to continue living the lifestyle of instant gratification that they have become accustomed to.
It must be stated thought, that the problem is not just the students or young adults of today. There is also an epidemic of Americans who are older who are making purchases everyday they don't really need using a credit cards.
When it is all said and done, living this way will ultimately cost you more than money. Buying things just because you want them or want to impress others may seem like a good idea at the time, but when you discover you are paying over twenty percent interest on your credit card, it may be a wake up call. Failure to make a payment on time will begin the erosion process of your all so important credit rating. At the end of the day, you will be unable to get a conventional loan due to the poor credit rating and will have to resort to a one hundred or more percent interest payday loan or find a way to get an adverse credit loan. Once in the grip of debt, you sink and are unlikely to ever surface again.
What it boils down to is that you must stop buying things for yourself or your children that you don't need and/or can't afford. Remember, if you don't have enough cash to pay for something, you should pass on it. Consider cutting up all credit cards and using only a debit card which takes the money directly out of your checking account. Do not give your child a credit card with free reign to use it!
In conclusion, use common sense when making purchases and teach the same mantra to your children.
Finance 101
By: bennpjkwme
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