Budgeting
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For example, if you have a long commute to work and need to invest in a good car, you may want to think about down-grading your living expenses, maybe to a smaller and cheaper accommodation. Also, for the opposite situation, if you live close to work and can get a cheap car or even take public transportation; you can afford a more expensive mortgage or rent payment.
Interview with anonymous budgeter:
You’ll find that people with the most personal debt are young. Maybe this is because they just left school and are paying off student loans. After all, the average student loan debt is around $29,400. However, it is partly because they are inexperienced.
“When the price of gas goes up, so do the number of consultations students schedule with our office,” says Paul Goebel, director of the Student Money Management Center at the University of North Texas. “Transportation is often an underestimated cost.”
This is a prime example of an underrated expense for college students. Even adults have unexpected expenses. For example, suppose you get into an accident and it was your fault. You need to be able to pay your insurance deductible but you don’t have that money on hand; this means dipping into that savings account you already prepared. Everyone has unexpected expenses, but budgeting may help with this burden.
Now for the monsters of personal debt: credit cards and loans. Credit cards are a great tool to build your credit with if you know how to use them. This is where the issue lies. This doesn’t mean swiping your card in a machine, this means actually paying the bill. The best thing to do with a credit card is to pay the bill in full and on time. This requires thinking at the time of purchase about if you can pay back a transaction when the bill comes. One tip is to never go over your credit limit, which is how much you are allowed to borrow. Loans are also considered to be a good tool. If you can’t afford something in full, often times you can take out a loan and progressively