It’s funny how life works isn’t it? It happens in stages and we are focusing here, in particular on personal finances. You begin life completely dependent on your parents. They buy everything you would need and some of the things that you might just want. Some parents provide kids with pocket money to ensure they learn fast how to handle money. Not just how to handle it but how to save and know when you really want something as opposed to a whim. As we get older, we begin to realize there are things in life that our parents can’t afford. Or, that we don’t have want them to have to buy. So, we arrange for our own income and get a small job such as a paper route. Independence builds but we don’t quite escape our parents aid until much later.
If you go to university or college, there is a good chance they’ll be paying at least some of your tuition. Even if they’re not, they will act as a guarantor. That means that if you can’t pay, then they will, and this gives you a nice little safety net. It doesn’t matter what happens to you financially. There will always be someone to soften the blow. But when you enter your twenties, that changes. Suddenly, you’re on your own, and many people find this difficult. It’s understandable too because life slowly but surely becomes very real. Now, if your finances go down the drain, you could be in real trouble. Your parents won’t be there to save you this time.
Now, you might say, well my parents will always provide me support if I need it. Don’t be so sure because, by the time their kid reaches 20-25, they’ll be thinking about retiring. They might not have the money to help you and even if they did, would you want it? Don’t you want to prove that you can survive this world and the financial pressures without their help? Of course, you do, you just need to learn a few lessons first.
Strapped For Cash
What should you do if you desperately need money and there is none in your account? You have a few options here but most people will turn to borrowing for raising cash fast. They’ll look at lenders or possibly just put it all on credit cards. First, it’s important to be aware that no matter how it feels, this money doesn’t belong to you. When you have a credit card, it’s easy to think that it doesn’t matter how much you spend. But, you do need to pay it back and if it takes too long the amount is going to increase. That’s the last thing that you want. If you’re borrowing from a lender, you have other issues. While there are plenty of lenders on the market who can be trusted, others can’t. You’ll need to learn to differentiate between the two. Borrowing too much money too often can lead you into the debt spiral. At this point, you’ll be borrowing to pay off loans you still haven’t paid back. The amounts grow and this is how people end up in serious financial trouble.
The bad news is that at some point in life everyone finds their finances limited. It’s how you handle it that matters. You might think it’s best to borrow from someone you know rather than a company but be careful with this idea. First, by doing this, you’re making things personal which is never a smart move. Essentially, it means that someone you care about now associates you with money trouble. Second, they might surprise you. They may well be more strict about paying the money back than your typical loan company. You never can tell about some people until you put them in that situation.
Is there another way to deal with the issue, rather than borrowing. There is, but it requires a little foresight. By reading this article, you hopefully understand that you could face monetary issues in the near future. As such, you should be able to prepare for them right now. First, it’s important that you always have money tucked away that you can use in an emergency. This should mean that you never have to borrow. Second, you should think about budgeting your finances. Make sure that you never overspend in areas where you could have more easily saved. Finally, you need to cut down your costs of living as much as possible. If you can, save money in areas where you won’t really notice it like your home bills. That way, you can reduce spending without it affecting how much you enjoy life. After all, you’re only on this earth once.
Credit Crumbling
If you do borrow money, it’s crucial that you pay it back on time. Otherwise, you can damage your credit score. Your credit score affects a lot more about your life than just your finances. It can impact your career, your property, and even your relationship. A poor credit score means that people can classify you as a risk. If you do damage your credit score due to low payments, it’s easy to fix. You just need to borrow more money and this time make sure that you do pay it back on time. Slowly but surely, your score will increase to a level that is respectable.
Looking To The Future
There are far too many people in the world who forget to think about the future. Instead, they live in the now, and we’re sure this leads to an enjoyable few years. At the same time, though, it also means that eventually, you’ll be under immense pressure. You won’t have saved or made any extra money and due to this, you will be unable to handle issues such as retirement. Retirement might seem far enough away that you don’t need to think about it. But you’ll be there sooner than you think. Just look at how fast the years have gone by so far…
Milo Senalle
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