Debt Part 1 - A four letter word! But why?Submitted by Helkie Financial & Insurance Services Inc. on July 15th, 2018
DEBT PART 1
A four letter word! But why?
Debt is a part of life. So why is it such a dirty little word? Why are we so afraid to talk about it? Shame? Embarrassment? Or pure lack of understanding? Whatever your reason, cut yourself some slack. This is not something they teach us in school. Perhaps it was never something we spoke to our parents about. In addition, we get marketed to every day about why we need all the things in our lives to make us happy. Marketers are geniuses at tapping into our insecurities and they can make anything look like the greatest deal in history. And it may be – today. But can you afford it? If you're purchasing things you can’t afford to make you happy then you may want to look at that. But let’s talk about how you figure out if you can afford something or not.
How much do you make in a month? Now subtract all your fixed expenses (rent, car payments, etc.). What's left? Is it enough to cover the payment?
If you lost your job tomorrow what might happen? Do you have a reserve fund to make payments?
Is this something you need or something you want?
I find it amazing when I ask people if they can afford something and they really have no idea how to figure that out. It's far more common than you might think. I will say that if you're purchasing something and you are unsure if you can pay for it or make the payments, perhaps you should do some more homework. Speak to your banker, Google it or use one of the hundreds of personal finance apps that are out there. Or get yourself a financial advisor who will take the time to understand you.
There's a lot of bad information out there about how much it costs to work with an advisor. You may be shocked to find out you can find someone who fits your budget. And that they do a heck of a lot more than pick stocks. Did you know that people who use a financial advisor are three times more wealthy than those that don’t (Value of Advice, Advocis, 2016)? Remember you're human after all. We all need a little help along the way.
Knowing is power!