Is anybody out there a little worried about their future? If you watch the news life is going to get a bit scary. If you watch youtube you might feel woefully unprepared. Do you have cash saved away or food stockpiled? If you make it through the end of the pandemic whenever that might be can you survive hyperinflation? Will you ever be able to get out of debt, buy a house, or save for retirement?
We are constantly being bombarded by news and advertisements that move our focus from place to place. It becomes increasingly difficult to get your life under control because there is just too much to focus on. Previous generations set up a system that would take care of them when they were older. And those systems were not designed to improve over time. Therefore those in our elder generations are not fully taken care of and those of us heading to our elder years know that will not suffice.
We don’t have pensions. We don’t work jobs until retirement. The majority of our financial knowledge has been learn as you go, but no one told us where to go to find it. So what do you do? The US personal debt statics are staggering. Leaving many of us feeling hopeless.
According to a 2021 CNBC Report, the average American debt is $90,460. This includes student loans, mortgages, credit cards, and more. The debt statics also show Gen Xers with the highest average of $140,000 plus. If you find yourself in this category I am sure the idea of money is overwhelming. So much so that maybe you bury your head in the sand and just know that you will be working for the REST OF YOUR LIFE.
Our life has been designed to keep you in a constant loop of debt. For those of us who have not found a way out of the loop things may seem bleak. I would like to encourage you that things are not as hopeless as they might appear to be. You still have a chance to at least get your debt and life under control as you age. Here are 3 tips to help you get back in control of your finances and get out of the debt cycle.
1. Find a tracking system
First things first you have to start thinking like a financial institution. Any bank or accounting firm and business that deals primarily with money does this one thing and that is to track everything. That means all expenses and all income. Step one to regaining control of finances is to put in place a system that will help you to monitor everything coming in and everything going out.
2. Take inventory and assess your debt
Next, you need to assess your debt. How much debt do you have? What are the interest rates and due dates? Having the picture in front of you may be overwhelming but knowing the actual problem vs. just making payments can make all the difference. It allows you to set goals and create a plan to achieve those goals.
3. Find a budget that works for you
Once you have your tracking system and you have determined your personal debt. You will need to create a budget. Many people have been taught to start at this step. And if you have no debt this is a great start. This is the step you teach your children. So that they can avoid the debt crisis that plagues so many. But for those of us that heard about budgeting but never fully implemented it we will get to this step only after the previous two. This is because we need to know what we are making a plan for. Budgeting is hard for many people because we create arbitrary numbers based on what we might find in an article and not based on our actual lifestyle.
After you have these things under control then you move to a building wealth phase. That involves increasing your sources of income, learning wise investment strategies, and making your dollar work for you.
How are you feeling about finances? Do you have any other measures to that you would put in place to get a clean financial slate? If you have questions or feel you could use some help. Please comment below or reach out to me for more help.
The average American has $90,460 in debt—here’s how much debt Americans have at every age by Megan DeMatteo https://www.cnbc.com/select/average-american-debt-by-age/