Credit used to be a nasty word to Americans. Living on credit meant that you were not capable of providing for yourself or your family. Many would rather live in abject poverty than accept food or shelter by means of credit.
It is a completely different world that we live in today. Using credit as a means to obtain what you covet whether it’s a car, a house, the clothes we wear or the food we eat, has become a way of life. Unfortunately there is no training or classes available in our current school system to teach young people about credit and how it works, so we are now finding ourselves a society that is in debt. The terrible thing is that it is happening to younger generations than in the past. Those who are in their 20’s have as much debt on their plates as someone in their 50’s, but with much less to show for it.
Teaching children while they’re still young about credit and its risks is one of the most important things a parent or teacher can do for a child. Most teenagers are applying for credit cards before they even know what a credit score is. Young people are graduating from college with mountains of debt before they even begin their lives as adults and most of them do not even know how to check their credit scores themselves.
The old saying “if you don’t have the cash for it, you can’t afford it”, can only be applied for small items in today’s world. Not too many people are going to be able to pull thousands out of a savings account for a car, or tens or even hundreds of thousands for a house. Even a small apartment in New York can cost hundreds of thousands of dollars. Learning how to budget your money will help an individual to see how they may save for the things that they want while still affording the things we all need, such as food and shelter. Budgeting may not be all that glamorous, but understanding how a budget works and starting while a person is young is the key to living a financially stress free life. Starting a retirement account while you are young may also seem a bit premature, but the younger you are when you start the younger you can be when you chose to retire, instead of retiring as late as possible because you can’t afford it. Using a retirement calculator will help an individual to understand how much is needed to save each month to be able to retire and will also help in determining if the money you have saved will last in your retirement years.
Learning the basics about your own finances is the key to staying as debt free as possible, living your life comfortably and being able to retire when you would like to. Turn a blind eye to your finances and you will be wondering, as retirement age approaches, how you are going to be able to afford to live.