As an adult, you have to handle a plethora of things and your finance is one of them. It is essential to keep track of your debt. Otherwise, no doubt you will reach a point that when you have a walk around with a bad credit. No one life debt in their life but at some point in your life, you have to face it. Believe it or not, the debt is not inherently bad; sometimes taking a certain type of personal or installment loan becomes the only option to move forward, no matter whether you are in college or a business owner.
The early you become aware of your current financial situation and the upcoming debt, you can develop a strategy to pay them off without facing any problem. Unfortunately, there are some debts typically four of them that can catch you with surprise. Here is a list of four major debts that should be under your radar all the time.
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- Medical Debts: First things first, and it is a big one. The medical debt is a growing problem in the US. The people with debt problems and financial stress are always at some risk instead of medical issues. It might surprise you but a medical bill can dig a deep hole in your personal finance. Today, every three of five American families are facing one or other medical issue which is running their financial assets. A trip to the emergency room can cost you more than non-emergency care. In case of emergency, you do not have any time for the insurance company – this might result in higher medical bills. There are only a few American families with enough resources to be invulnerable to heavy medical emergencies. Although it might be the bet you can afford but it is possible that you still end up in challenging scenarios. It is always recommended to focus on your health care area. It is essential to take a few steps ahead and to prepare yourself for heavy medical bills to achieve successful solutions. With proper preparation both, you can your credit score will remain on the healthy side of the scale.
- Auto-pay Gone Wrong: Presently, we live in a technological world where automation is everywhere. You can automate your bills as well with the auto-pay biller. The working of auto-pay is simple and straightforward. You can set a date and time in the biller and point it to pay the amount of the service. The biller will then automatically pay the bill amount without double-checking from your end. In some cases auto billers come in a handy while, on the other hand, the system is not at all reliable. Since the amount can be billed without your concern –it is highly recommended to regularly check your auto-pay is functioning properly. Otherwise, you can end up with an expected debt that can keep adding up. In some cases, where the amount of debt is small you can apply for short term online payday loans and pay back the amount without facing any penalties. Needless to say, checking your auto-pay way too frequently might not help as well.
- Automobile Troubles: Like humans, like machines, as you can face any emergency likewise your vehicle can face an unexpected and very expensive emergency. Do you have vehicle insurance? Although, vehicle insurance may not be quite as complex as doctor emergency fees managing car repair may not be easy at all especially if you are keeping a vehicle for the very first time. In case of a collision, you may have to go through tough legal processing before your automobile insurance will pay you. You may also take some short term payday loans to overcome the unexpected situation. It is highly recommended to practice car maintenance to lower the risk of a costly breakdown. Also, you can research online and find the best and budget-friendly mechanic nearby to get assistance on the breakdown.
- Student Debt: Students looking for opportunities to join their favorite college often choose to apply for loans. Most of the time they take loans without proper financial evaluation. However, the situation becomes critical when it comes to pay-off the loans. Recently a number of student debt holders have been dealing with the unpleasant surprise. Although there are running programs like ‘public service loan forgiveness’ for the student nevertheless you have to follow the correct financial practice to overcome the stress of paying off your complete loan.
THE HIDDEN LESSON
WHEN IT COMES TO MANAGING YOUR FINANCIAL RESOURCES THEN PERHAPS THE KEY IS PREPARATION. YOU CANNOT PREPARE FOR EVERY SURPRISE, BUT DEFINITELY, YOU CAN APPLY GOOD FINANCIAL PRACTICE IN YOUR DAILY LIFE. HERE IS A LIST OF BEST FINANCIAL PRACTICE AND HOW TO IMPLEMENT THEM:-
- Use Tax-Advantaged Accounts: Find the right high-income-earning and contribute to the retirement plan as well as make the long-term financial goals.
- Be Aware Of Investment Recommendations: When you need for professional advice, do your research and then make a plan to meet the financial correct financial advisor.
- Use Compounding Method: You can choose to achieve a significant earning by using the compounding method. Your lifestyle must allow you to practice the compounding method. It will not only reduce your debt but you will be able to save more. ( demon of slow content)
- Prepare A Financial Plan: Last but not least having a financial plan will help you identify your financial goals and to make milestones to reach them. You must reach a much better financial position to maintain a clear picture of your current financial situation.
UNDERSTANDING YOUR EXPENSES AND FEE STRUCTURE IS IMPORTANT BUT HAVING THE FINANCIAL LITERACY TO PAY BACK YOUR PAYDAY LOANS IS THE KEY. SO, MAKE SURE TO TAKE SOME TIME AND RESEARCH ABOUT LOANS AND STRATEGIES TO COME OUT OF DEBT.