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Saving Money Can Help You Avoid Bad Credit
By: Joseph Kenny
One thing that many high schools today fail to teach students is finance
management. Studies have shown that many students graduate from high school
without knowing the basics of personal finance. Many of these same students will
shortly be sent a credit card after their graduation and because of this it is
easy to see why so many people today have problems with debt and bad credit.
Broadcasting Some Bad Habits
The news and media are a part of the problem as well. We live in a society where
people are constantly told that they need to borrow money in order to pay for
things like cars, houses, appliances, and other large expenses. Financial
experts tout the benefits of using secured loans, home loans, or other credit
tools in order to pay for the things you need. The concept of saving money is
rarely mentioned. Many people borrow until they realize that they've borrowed
too much, and then it is too late. They end up debt they can't get out of, and
their credit could be ruined.
Save For Your Future
Saving money is a simple way of getting the things you want. It promotes
discipline, honesty, and hard work. It is also a way of building long term
wealth, especially if you put the money in an IRA, 401K, or other long term
investments. It is a fact that the average American who makes $33,000 per year
are guaranteed to make well over $600,000 in 20 years. The problem is, after 20
years have passed, most Americans don't have anything to show for it. This is
because they fail to save money.
Money, Money, Money
Most choose to take the easy way out and loan money from banks and credit card
companies to pay for those big expenses like houses, cars, and education. These
institutions will always charge interest on these loans. Consumers will never
pay back what they owe. They always pay more, because interest is money that is
charged on money. In effect, credit card companies become the masters, while
many consumers play the role of being slaves. These institutions are guaranteed
to get back more than they loan because of the interest they charge.
Because of this, it is important to save money for big purchases. Since we live
in a society that is credit based, there is nothing wrong with having one or two
credit cards. However, too many people end up with so many credit products that
they put their financial future in danger. Saving money is a simple thing that
anyone can do as long as they have a job or own their own business. You want to
set goals for yourself. If you make $33,000 per year, this means that you
probably make about $2,750 per month.
Imagine What You Would Do
What if you could set aside $750 of that money and save it? By the end of the
year, you would have saved $9,000. Instead of carrying this balance on your
credit cards, you could have it in your bank account. If you do that for another
year, you would have saved $18,000. As you can see, doing this for a number of
years can give you a fantastic amount of money. This is especially true if you
invest a portion of it in mutual funds or other investments.
Personal Finance Training Starts at Home
Parents should teach their children about the importance of saving money while
they're young. Don't count on the school system to do it, because it is likely
they won't. Instead of buying them something when they ask for it, why not
having them do chores or jobs and then pay them? This will teach them to be
mature and responsible when they are young, and when they get older they will
not be prone to getting credit cards or loans in order to pay for expenses;
saving money can help you avoid having bad credit.
About the Author:
Joe Kenny writes for Card Guide, offering the latest information on
credit cards in the UK, visit them today to
transfer your credit card balance and start
clearing credit card debt today. |
