Get of debt today! It sounds a bit like a late-night infomercial, but the truth is that a debt-free lifestyle can be within reach for you and your family.
Reducing your debt-load can be the next, and biggest step, towards owning a home of your own. This is because you must have a strong credit score to buy in today's market and a strong credit score comes from healthy spending habits and low debt ratio.
Credit used to be something different than it is today. Some reports show that the volume of consumer loans more than doubled in from 1990 to 2000. Changes in credit were happening long before this decade, though. People used to buy only what they had the cash to use. Times have changed.
Students today graduate with an average of $25,000 in student loans. That is a staggering amount consider the current rate of unemployment.
The average American carries $10,700 in credit card debt (CNNMoney) and $59,000 in total household debt.
That's a lot of debt.
When the 2009 recession hit there was a resurgence of Americans paying off debts and funneling money into savings accounts. The U.S. savings rate was on the rise. This showed that American could tighten those purse strings when push came to shove.
While there are many families that are truly struggling to make ends meet and who seek out lines of credit to keep food on the table or the lights turned on, there is a large percentage of Americans that simply swipe the plastic and live on a margin.
Are you guilty of living past your means when you could instead be working towards a debt-free lifestyle and the dream of homeownership?
Homeownership is a great way to create long-term wealth and stability for your family. Today's buyers, however, need to have healthy credit scores (less debt) and of course at least 20 percent cash to put down. Let's get you started toward that dream.
The first order of business is to take an honest look at all of your debts and monthly expenses. Compare this to your monthly household income. Are you spending more than you make? Then it's time for a real intervention.
After you've taken a good, hard look at your finances, it's time to rethink your spending. Start by paying off the highest interest loans and credit cards first. Don't fall into the trap of making minimum payments. Write out a budget of your monthly must haves: rent, groceries, gas, tuition, and utilities. Then use the extra funds to invigorate pay off debt in big, healthy chunks.
It'll be an adjustment at first, but then your new spending ways will become habit. Find alternatives to your favorite activities and nip shopping addictions in the bud. It's time to switch up your priorities. It's not all about having fun. Sometimes we need to be responsible adults and pay off debt before we take vacations, buy new clothes, or buy new cars. Learn to appreciate what you have, stay away from buying what you don't need, and to keep your goals in mind. Homeownership is a very worthy goal. Make budgeting and paying off debt your top priority and you'll reach that goal!
Written by Carla Hill
Published by Realty Times
Thinking about Buying or Selling?
Call Alvin's Team Today! 877-651-7810
Or visit our website: www.LivingLakeTahoe.com
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