Managing Credit in an Uncertain World
Taking care of your credit when the market seems so uncertain can be difficult. After all, there’s really only one way to take care of debt — you have to pay it off. However, in order to pay it off you actually have to put hard earned money on the line. That’s a little scary when you’re not sure if you could wake up tomorrow to find that you’ve lost your job or something worse like a terrible illness. How does anyone think about debt when everything seems so unsure and difficult to deal with?
The truth is that you have to take care of the things that really matter first. You need to make sure that your family is fed. You have to make sure that your career is as solid as possible. That’s why we advise young professionals to be as strategic as possible so that they don’t have to worry about how they’re going to pay bills. You will also want to ensure that you are looking at every penny that enters or leaves your house. If you have unnecessary expenses, they have to go if you really want to pay down your debts. This can be pretty hard on the whole family, because everyone is probably used to the treats, but if you want to manage your credit better you have to stop spending so much money.
We aren’t trying to be blunt on purpose, but the era of sugarcoating is what has led this country into such a mess financially. Instead of being honest with each other about the nature of personal finance, we are glib about credit. We tell people that it’s okay to charge a pair of new shoes onto their credit cards. Previous generations got by just fine without credit, but we’re not saying that you have to give up credit completely.
If you aren’t in too much debt, you can continue to use credit cards. They make certain things very convenient, like traveling. It’s easier to just book a rental car when you can plunk down a credit card than is to try to see if anyone will take your pre-paid debit card. Not every place will honor pre-paid debit cards, but just about everywhere you look will honor credit cards. It’s just the way it is, so you will need to plan accordingly.
Keeping track of your spending and what you’re paying each and every month is a good thing. For one, it keeps you focused on the goal at hand. When you’re just trying to pay things day to day, you might feel as if there’s just now ay that you’re ever going to get ahead. However, if you use a service like mint.com to figure your spending out, you’re never going to have to really worry about whether or not you’re on track. Financial programs will do the leg work for you so that all you really have to worry about is what to do with the money left over.
Just as you want to pay down debt, you also want to look at how to avoid the problem happening again. Far too often we don’t really think about a debt-free life, and what we need to do to maintain it. This is a similar idea in the world of nutrition and fitness, because people dream about being smaller and at their target weight. Unfortunately when the day comes that they’re at their goal weight, they don’t know what to do next. It usually ends up leaving people running after bad habits instead of trying to get things done on their own terms. The methods that you will use to create your debt-free lifestyle are still the same ones that you will need to use in order to maintain the lifestyle itself.
Saving money is just as important as paying down debt. If you don’t already have a savings account, you will want to definitely create a savings account for yourself. Don’t forget that making money is very important. You might not think about it like this, but if you had the ability to make more money, you wouldn’t really have to worry too much about how to pay down your debts as a whole> you would also have more money to do the fun things in life, and that’s what everyone wants anyway, right?
You don’t have to go back to school to necessarily gain new skills — with the world being as uncertain as it is, unpaid internships are on the rise. If you’re willing to live off the money you’re already making, an unpaid internship can help you get your foot in the door and gain skills that would be harder to develop on your own. There are also free classes for certain subjects online, and plenty of discussion groups to talk about interesting topics that may have a practical application elsewhere.
Computer programming is something that you can teach yourself that can lead to an additional income in the house. If you already write, you can get books from the library that shows you how to turn your passion into an actual profession that brings in money. You don’t have to feel like it’s impossible to make money if you really put your mind to it. The rise of the Internet has made it even easier to make money because it can connect you to people that are looking to outsource work to other people. Don’t let the outsourcing myths scare you — there’s work online for everyone, not just people that come from a certain country.
Overall, managing credit in an uncertain world can be tricky, but it doesn’t have to be that way at all — why not get started today?
