Marissa C. – City Honors College Preparatory

New data shows that 73% of American consumers die in debt. As of 2013, more than half of Americans between 18 – 40 have children. Usually have 3. Children now, are our future. If children see that their parents are in debt, they’re going to think II it’s okay I will pay them back” or II it’s only a little bit of money iwi owe.” but little do they know, being in debt can ruin someone’s entire life. So that’s our problem, so now here’s our solution. To prevent someone from going into debt, they need to start off with a savings account. Crazy the world is now, if something bad happens to you and you don’t have insurance, that’s where the savings come in. Because you have savings, you have money stored away for emergencies. If you are in debt, or before you are in debt, make sure you know your rights with debt collectors. People often take advantage just to get more money out of you. Credit report mistakes can lead to disqualification for mortgages and car loans, as well as increased insurance premiums and interest rates.

In some cases, those mistakes can even prevent you from getting a job. So always make sure you know what you’re doing and do some research. Creating a budget is something you want to do. If you constantly tell yourself something, you are mentally teaching yourself. By budgeting, you are learning what’s really worth its price. By doing so, you will be saving thousands each year. One thing kids often don’t know are there priorities. People buy things that they want, but we should really buy things that we need first. You should save at least 10% of your income. Think of this as a bill that must be paid. Initially, this may be used to build up an emergency fund and later may be used to build your retirement fund. By saving at least 10% of your income you always have a buffer to keep you out of debt should financial emergencies arise. Also, do not carry a balance on any credit cards or personal loans. If you can’t pay off your credit cards in full at the end of every month, don’t use them. Avoid financing personal items such as furniture, clothing and electronics. Instead, wait and save up the money to pay cash for the personal items that you want. Debt consolidation and debt settlement programs are both very popular ways to help consumers get out of debt in a short period of time. If you are in deep debts, it is no shame in asking for help. To make sure you never go into debt, you need to avoid unnecessary balance transfers. Don’t transfer balances from card to card to avoid your due dates. If you transfer a balance to another credit card, have a good reason, like taking advantage of a lower interest rate. Otherwise, your balance will simply increase because of the balance transfer fee. Don’t miss credit card payments. Staying on track with your credit card payments is one of the best ways to avoid credit card payment. Once you miss a payment, your next payment due will be much higher since you’ll have to make two payments plus pay the late fee. It gets tougher to catch up, so it could possibly put you into debt. Avoid cash advances. Cash advances are one of the worst ways to use your credit card. If you have to use your credit card to get cash, you’re likely facing some financial trouble. Otherwise, you’d withdraw cash from your bank account.