5 Common Financial Problems People Face
16 Apr 2020
Did you know most Americans are one emergency away from being financially ruined? Taking care of your finances is an important part of ensuring a stable future. In this article, we will show you some of the biggest financial problems most people face.
Whether it’s not having a budget, spending too much money, or not having savings. You more than likely have some sort of financial difficulty. Below we will list five of the most common financial problems.
1 No Budget
A budget is the first step to having healthy finances. A budget is an outline of your monthly income and expenses. This allows you to see exactly how much you’re spending a month, and on what.
When you have a budget and stick to it, it can help you stop making impulse buys. Therefore helping you keep more of your hard-earned money.
The money you save from sticking to a budget can even go towards your emergency fund.
2 Not Having an Emergency Fund
Without this emergency fund, if you were to lose your job, or even have an unexpected bill, it could ruin you financially. Your emergency fund should include six months of housing payments, bills, and other expenses.
That way, if you lost your job or have an unexpected bill, you have the ability to keep paying your regular bills without being financially ruined.
3 Not Enough Insurance
Chances are you have health insurance and car insurance. But do you have enough of them to cover you if something unexpected happens? If you just have liability insurance on your car and you get into a wreck, chances are you won’t be compensated.
This is also true with homeowners insurance and renters insurance. It’s a good idea to review your coverages to make sure you won’t be losing a big part of your finances if something unfortunate happens.
4 Unnecessary Expenses
Chances are you pay for some unnecessary expenses like cable, subscription services, and even eating out. These expenses can add up quickly and drain your finances.
It’s advisable to cut these expenses and put your money to better use like investing or saving for retirement. If you need help managing expenses you can hire a financial advisor.
5 Living Off Credit Cards
Credit cards can be nice to have but often cost more in the long run. Credit cards have high interest rates and steep penalties for late payments. While it might be tempting to charge your morning coffee (which you could make at home cheaper), think twice.
Credit cards should be used sparingly, and you should always think your purchase through beforehand.
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We hope this article helps you with your financial journey. If you need more one on one help with your financial problems please reach out to us here. Or, if you’re interested in investing, we can help with that too.
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