As you go through life, you have to make sure that you have all of your financial ducks in a row, or you may be in for a few nasty surprises along the way.
When you were a kid, your parents provided a roof over your head and made sure that you had food on the table. Once you’re responsible for your own wellbeing, you need to be certain that you can take care of yourself and your family. This includes making sure your finances are in good order.
Around two-thirds of Americans don’t keep a formal budget, and just a third have long-term financial plans and goals.
This means that the majority of adults in the U.S. are going through life juggling and improvising their finances each month and their financial stability will suffer. Half of the American households polled say they live paycheck-to-paycheck, and close to half say they are stressed or anxious about money.
Having a budget in place, no matter how much you earn, is not just a good idea, it’s actually necessary. If you don’t have your budget squared away, you’ll have no idea how much is coming in and how much is going out of your accounts, and that leads to chaos.
If you have no hard evidence about your money situation, you could end up in serious debt, and financial troubles could be the order of the day.
The average household in this country has close to $140,000 in debt, including credit cards, student loans, and more. That is a lot of money to owe, especially since the median earning is a shade under $60,000 annually.
Working out your budget will make sure you have a good snapshot of where your money is going and how much you need to earn to keep yourself out of spiraling into an uncontrollable debt cycle.
Working out your budget means you have to take into account all expenses, and then work out how you will be able to pay for them, even if it means you have to get a side job.
For example, the average household spends around $17,000 on housing. You may look at that and think that’s a lot of rent every month, but it breaks down into expenses that all add up. The average amount spent on rent or mortgage plus interest, property taxes, and insurance comes in at almost $10,000. The other $7,000 is spent on utilities and any other expenses needed to run your home.
If you don’t budget, you are setting yourself up for stress, worry, and possibly crippling debt.
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