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Know Your Financial Crisis And Say No To Your Unwanted Expenditure!



Financial Crisis

Money money money! Money can do anything; actually, money can do everything. People work to earn money. They need money to earn a living. They need money to survive. People in the world do various things to earn money. Not only earning money but saving is also important. There must a limit to everything; people should know their limits in spending their money. A future planning is required for each and every person in the world to proceed in his or her life. There are several factors due to which you need to have a control on your expenditure.

According to the latest survey, almost half of the population of United States would struggle to come up with a four hundred dollars unplanned expenditure. Most of the families in America live on their month to month salary basis. They don’t have any financial cushion. Most of them spend what they get without saving some money for their future. Here are some reasons for which you have to reduce the over exploitation of the monthly earnings. Each factor is explained in detail for a clear understanding on why to save your money for your future. The reasons are mentioned as following:

1. Lowering of your credit score:

A Credit score is a very important term to each and every American. It is a number representing the creditworthiness of a person. It represents the chances that he or she will pay their debts. By looking at the credit score of the consumers, the banks and credit card companies lend the money at their own risk. The credit score considers several factors, the major factors are, the history of payment, which tells the ability of that person to pay his bills on time.

If a person is unable to pay his debts in time, his credit score will automatically decrease. This will affect his or her chances of getting a loan. According to experts, the credit scores lies between three hundred to eight hundred and fifty points. Any score below five hundred and eighty is considered as poor and their chances of getting a loan are very less. If your credit score is less it means that your expenditure is more than your monthly income.

2. When your housing takes most of your income:

There are many advantages having a spacious and lovely house in the middle of the city or near to office or school or beach or tourist attraction spots. The Major disadvantage of having a beautiful and peaceful house is the cost to be paid. For many Americans, the housing cost is the most expenditure that is spent on their salary. You cannot say no to if the expenditure is in the house or the furniture. But this is one of the major expenditure many of the Americans going to spend from their salary. It is the easy trap where everyone falls into and left out with the financial crisis.

 The expenditure on the house which includes mortgage loan, property taxes, house insurances etc., if this all summed up to more than 30%of your salary then it is the clear indication that you are in a big financial crisis. More than 50%of Americans belong to this stage by the recent studies. This crisis effects directly onto the retirement savings and health insurance. If you think having a beautiful and big spacious house shows your status and dignity, then in some months or years you will face some serious crisis. It takes much time and hard work to overcome this type of crisis. So better find a less lavish home that you can afford meaning property that takes less than 30% of your income.

3. No savings:

It is advised to save at least ten percent of their monthly earnings for emergency purposes. if you are unable to save ten percent of your monthly income, it means that you are spending your money too much. You are overexploiting the money you earn. If you are able to save money but not ten percent of it, you have to take some precautions so that you need not suffer during any emergencies. The best advice is to write down the expenses somewhere and try to reduce some which are not very essential.

There are two ways to approach cost cuttings. One is that you can you can slash one major expense like housing or car payment to improve their financial status. The other way is to cut smaller and less significant expenses like furniture, cable, shopping, restaurants, electronic gadgets etc. you can choose any one of the above methods to reduce your expenditure. By following any one of the above methods you can save a lot of money. This money saved can be used for various other purposes like hospitals, medicines, health care and other emergency purposes.

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  1. Pingback: Say Good Bye To Your Financial Crisis By Knowing Your Unwanted Expenditure –

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