The financial environment has been difficult in recent years. The effects of the recession have been unavoidable. It was all too easy during the early years of the Century to become complacent as real estate prices were rising year by year and credit was easy to obtain. Few were worried about losing their jobs and with their assets growing why shouldn’t they buy something on credit? There was a shock coming and the after – effects are still being felt.
There was a time when middle age was the time when you might have expected to have built up some assets anyway. In the early stages of a career, you may have had some student debt to clear. At the same time, your first home and a car would probably have stretched your budget to near breaking point. Years later as you are earning more money, and your real estate has increased in value you should be better off although the children are expensive. It might sound a simple life, but that is rarely the case.
Debt and Credit
Initially, most people need help with financing their education, and there have been reasonable facilities in place for years. Debt became a necessary evil in order to get a good further education and hopefully the best chance of a good future career.
Even those who found they could pay off their student loans and manage a car loan often struggled with their credit card debt.
Do you remember when you got your first credit card, and the provider gave you a credit limit? Suddenly you could buy up to that value but, of course, the statement comes in and if you could not pay the full amount you would have interest added to the outstanding amount. There is an obvious danger if you buy things that you cannot afford. In the end, the interest you will have to pay takes away all the pleasure of the credit card. Hopefully, you avoided such problems and life continued without any financial worries. However, you can use credit cards to withdraw cash when money is short and buy you weekly groceries if there is nothing left in the bank. They can actually subsidize daily life and often youngsters did that until their credit ran out.
Recession
Even the most careful of people found the recession hit their plans. Those in middle age that had built up significant equity in their real estate found values falling at a time they had hoped for continued growth. If retirement was looming, it became more difficult to set aside the money that had intended for that time. No one had secure employment anymore, and even senior executives lost their jobs with few alternatives overnight to find something else.
The bad news is that, even though, the recession has receded the recent growth figures in the USA are disappointing. When you also consider that there is still a huge number of credit cards in use and arguably toxic debt that consumers need to address society is still facing enormous financial problems.
The answer to the problem varies from person to person. Those with credit card debt should look at a consolidation loan. Such loans will pay off credit card balances that incur penal interest. There are online lenders who will respond quickly to applications for loans. If you are faced with a problem yet have a regular monthly income, you should investigate a loan as a matter of urgency. Even if you have a poor credit history, you are likely to get a sympathetic ear.
Budgets
Simply doing a budget is not sufficient to solve your problems. You must make sure it includes everything, and you analyze the detail to devise a strategy for the future. It may involve economies and almost certainly self – discipline if you have problems with credit cards. There is little logic behind carrying toxic debt, debt that is incurring high interest when rates are generally low.
The older you are, the more serious the situation can be. If retirement is looming it is likely that the day is fast approaching when less money will be coming in each month. It is surely time to act and where necessary seek good financial advice as well.