Excellent Personal Financial Management

The Dangers of Excessive Credit

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.