An increasing number of people have come to rely very heavily on a bank overdraft in order to finance their current lifestyle. The problem with such a situation is that it is more expensive, and a considerable amount of money has to be paid in interest to the institution with whom that overdraft has been arranged.
The simple fact of the matter is that it is far better to manage your finances responsibly in order to avoid additional costs which are ultimately only limiting the benefits which could be derived from that income. It is not easy to be in business today because there are millions of businesses that are vigorously competing for the support of the consumer and they will use absolutely every trick in the book such as clever marketing strategies in order to brainwash the consumer into supporting them.
This is why it is so important for the consumer to carefully analyze their own needs and to make wise decisions about the things which are purchased in order to ensure that their money goes as far as possible.
Cultivate a Habit of Saving
Most young people have only one objective, and that is to enjoy their lives as much as they can and to spend all of their income on various kinds of fun activities and inexpensive goods, thinking that they have a lot of time to cultivate the habit of saving. The problem is once someone has conditioned themselves to spend everything they earn, it becomes very difficult to break that habit and therefore, these people will find saving very difficult.
This is exactly why it is so vitally important to cultivate that habit as early as possible in your career. The same thing applies to a comfortable retirement, and so many people think that there is a very long time ahead of them and therefore concerns about retirement are totally unnecessary.
However, it is exactly these kind of people who are very rudely awakened and who suddenly realize that their safety buffer has been wiped out and they still have not made sufficient provision for their retirement. These people are then forced to consider other more radical options to finance their way of living in retirement.
The Safe Haven of Real Estate
Millions of people have this notion that an investment in real estate is a wise and a safe option in order to ensure that most future needs could be sufficiently met. That notion has been comprehensively disproved by the recession of 2008.
In only three years, over 4 million homes have been repossessed, leaving those homeowners with very large financial debts. What does a person do when he has several creditors contacting him frequently in an attempt to collect payment on outstanding debts?
An increasing number of debtors are turning to debt consolidation as a viable option to deal with the many pressures associated with large debts. The one ultimate benefit of debt consolidation is that you are no longer required to deal with 5 or 6 creditors simultaneously, instead, you now have only one creditor who will contact you in order to request payment of your debt.
A successful business owner may spend months and in some cases, even years on the design of their business plan. Such a business plan will consider critical factors such as risk management, the target audience of the business and startup capital to mention only a few vital factors. That startup capital is not unlimited and when too much is borrowed, the business may simply not be able to generate sufficient profits in order to allow the business owner to repay such debts.
Likewise, any person who possesses basic financial acumen will never borrow more than they can afford to repay. Doing so will always result in tremendous financial problems and such a person will remain a slave to his creditors as long as he lives. So many people have this notion that retirement is something which is an undeniable right and that all they have to do is to stick it out for 30 years and once they reach the age of 60, they will receive their dues and their pension will take care of them till the day they die. The problem is that a very large number of people have suddenly come to the realization that their assumptions were childish and foolish.
Use Common Sense
Just suppose that you have three outstanding debts, one for a $100,000, one for $50,000 and one for $20,000. However, the interest on the $20,000 debt is very high while the others are substantially lower. Which one should therefore be paid first?
The $20,000 debt should be paid first because of the high interest which are charged on that debt, which is costing you a lot of unnecessary money. There are many greedy people who are so desperate to qualify for large loans to allow them to purchase expensive articles which they cannot really afford. Therefore, when they budget for something, they foolishly work on their gross income instead of their net income.
This is not a wise thing to do because there are many deductions which has to be accounted for and this is why many people find themselves in all kinds of problems and they continually have to contend with creditors who are determined to recover their losses.
The Golden Rule of Personal Finance
The ultimate and the most important rule of personal finance is to never spend more than your income. This is the absolute golden rule of personal finance and those people who live by this rule will never run into financial problems.
For those people who do not abide by this simple, yet cardinal rule, they will always find themselves in one kind of financial turmoil or another. They will never achieve true financial well-being.
Never try to solve your own financial problems and especially if you have already tried many options without success. It is much better to obtain professional assistance from people who have experience in financial matters. One option which could be considered is a debt consolidation loan which could be used to repay all of your other outstanding debts so that you are no longer accountable to many creditors but only to one ultimate creditor. Many consumers have found that debt consolidation loans is a certain way to relieve a tremendous amount of financial pressure, allowing the debtor to change the way in which they look at their financial situation.
Throughout history, it has been comprehensively proven that having some simple, yet effective personal financial rules can truly make a very large difference to your financial well-being. This has, however led to many financial rules which had an appearance of wisdom, but which ultimately has proven to be totally worthless.
There have been many people who have been abiding by a set of rules for many years and eventually, they have come to realize that those rules have provided them with no benefit or in some cases, extremely limited benefits and they would have been in the same position if they had not used those rules. Therefore, any person who is making use of a set of financial rules should constantly analyze those rules in order to determine whether they are truly effective and whether they are really making a significant difference to their financial well-being.
If it is found that a specific financial rule does not generate a substantial benefit, then it might be more beneficial to discard that rule. One financial principle which has been advocated for many years is the fact that leasing a car is more expensive than purchasing. There are many people who have come to doubt that assumption for various reasons. There are many people who are choosing the option of leasing a vehicle because it allows them to deduct such an expense from their taxes and this allows them financial benefits which could be invested in other critical areas.
Discarding Those Bad Rules
Another financial rule which has been advocated rather aggressively for some time is the supposed need for people to allow for at least six months of emergency funds in order to deal with a possible crisis situation. Once again, although this sounds like a critical necessity, the reality is that this rule may not be equally suitable for all people.
Some people may find in a specific financial situation that they may require substantially more resources while there may be other people who could get away with a lot less without drastically affecting their way of life. Every person therefore has to carefully analyze their financial expenses and cost of living and they will have to determine for themselves what will be a comfortable buffer in order to help them to deal with a possible emergency.
Eliminate Foolish Financial Rules
Most average consumers assume that investing in some lucrative scheme requires a large amount of money. The truth is that many successful financial investors have started with almost nothing, but they have reinvested every little profit until that investment has grown into a substantial profit. There are endless opportunities available to consumers and there are financial experts who will be more than willing to provide you with outstanding advice which may enable you to make very profitable investments.
Unfortunately, regardless of whether you are making use of well devised financial rules or whether you are following some that are not as effective, it still happens that people encounter financial difficulty at some point during their life. This is always a very uncomfortable situation to be in and how you respond to that situation is very important in order to ensure that you get through that situation in the best possible way. One financial option which has proven itself over and over again is the option to consolidate. It simply makes a whole lot of sense to put all of your bad debts in one basket which makes you accountable to only one creditor and doing so can relieve a whole lot of unnecessary financial pressure.
It’s hardly a secret that gaining a university degree can leave you trapped under a pile of debt.
Whilst you’ll have a BSc, BA or MA hanging proudly on your wall, the upshot is typically a depleted bank balance and the sort of bleak financial prospects that even John Maynard Keynes would struggle to put a shine on.
Indeed, a recent study written by researchers at the Institute for Fiscal Studies (IFS) has revealed most students will still be paying pack loans from university when the reach their 40s and 50s, whilst many will never actually clear the debt.
The study also found a typical student leaves university with “much higher debts than before”, with the average money owed totalling more than £44,000. Add in the above-inflation interest rate on student loans and, in real terms, 45 per cent of graduates are paying back more than they borrowed.
On the face of it, whilst many graduates will pay back significantly more than they initially borrowed, the vast majority (73 per cent) will not repay their loan in full. On average, around £30,000 will be written off.
With that in mind, many budding students will attempt to reduce their overheads by swapping a bricks and mortar institution for an online degree that’s taught entirely through interactive e-learning and web-based tutorials.
But how does this educational path save you money over the course of your qualification?
Tuition Fees
More often than not, distance learning is less expensive than a traditional course. This is because your studies are conducted online, with all course materials made available through an interactive Virtual Learning Environment – which also means you avoid splashing the cash on all those expensive textbooks.
Travel Costs
When you’re studying for a full-time degree at a bricks and mortar university, travelling back and forth (if you’re not living in halls) can be an expensive business. However, by choosing an online degree, you can alleviate these travel costs and learn at your own pace wherever you have an internet connection.
Accommodation
Rather than moving to a new city or swapping your rural retreat for something closer (and more expensive) to the university, learning online allows you to kick back in your current accommodation. Whether you’re living with your parents or sharing with friends, you can keep the status quo whilst you gain your degree.
Now it’s over to you …
Have you ever considered an online degree? Perhaps you wish you’d taken a web-based course rather than heading down the traditional route? Whatever your story, please feel free to get in touch and let us know how it’s going – we’d love to hear from you
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