Many Americans who live paycheck to paycheck blame debt
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  1. #1
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    Default Many Americans who live paycheck to paycheck blame debt

    "Some 40% of Americans would struggle to come up with $400 for an unexpected expense."

    https://www.cnbc.com/2019/07/20/here...d-expense.html
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    I do believe it can be due to CC's as the interest rates are so high and as months go by, the debt increases if they're not paid off quickly.

    I also thought the same thing about bank accounts where there may be money in the account, but it's ear marked for things like mortgage/utilities, etc. That is the same thing here. If something happens (like when DH needed a car because his finally kicked the bucket), there isn't a emergency fund or anything like that. So DH had to get a lease. The money in the checking can't be touched since it goes to shelter.

    I agree with how to pay for things if an emergency pops up. If I didn't have the money, I'd sell stuff. I have a small emergency fund (5 mths of income) but with my surgery coming up and the costs involved with the surgery taking place in another state, it's going to be more than my fund. So, selling stuff, trying to work more and whatever else I can do will have to be the answer.

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    To me, CC's are just a symptom of the real issues - poor money management and/or not making enough money. At one point in my life there were weeks I was not able to buy gas to get to work and my CC was full. My downfall was that my money management skills were basically nonexistent. I was making decent money but I was over $60,000 in debt between CCs and student loans then to top if off I bought a house I couldn't afford. Thanks to FV I was able to learn money management skills, donated plasma and picked up a second job to dig myself out of the hole I created.

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    IMO credit cards are an illusion of wealth. People use them to buy stuff they can't afford, with the false belief that they can just pay it back next month. Or the next month. And then they are $30,000 in debt. I can't entirely blame the CC company for people's debt, you're not forced to go shopping and overspend. People do that to themselves.

    On the other hand, the companies ARE predatory and will give a card to nearly anyone who fills in an application, even without a job. And it used to be that you didn't need a CC, they were completely optional, but not today. Today you need a CC to do so many things, and a credit score to get housing and some jobs.
    Stop trying to organize all of your family’s crap. If organization worked for you, you’d have rocked it by now. It’s time to ditch stuff and de-crapify your world.

    If you're not using the stuff in your home, get rid of it. You're not going to start using it more by shoving it into a closet.

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    A clean house is a sign of a wasted life. ~unknown

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    It was touched on briefly but I want to give mention to student loan debt.

    I won't go on about my personal situation, but my husband and I both had them and it was a lot.

    Lots out there telling people not to use credit cards. But then we tell people they should go to college. Even if they come from families that can't pay for them and they wind up with huge debt.
    KathyB

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    College is expensive, but like anything there are ways to reduce costs and save money. Even 30 years ago it was acceptable to do a couple years at a junior college or community college and get your basic classes much cheaper. I was in a school where tuition capped at 12 credit hours, (3hrs per class) so if I added a 5th class to my schedule it was free. It meant a heavy class load, but I used it to advantage. And I see more of my adult friends going back to get or finish degrees now that they have better income.
    Stop trying to organize all of your family’s crap. If organization worked for you, you’d have rocked it by now. It’s time to ditch stuff and de-crapify your world.

    If you're not using the stuff in your home, get rid of it. You're not going to start using it more by shoving it into a closet.

    Use it up, Wear it out,
    Make it do, Or do without. ~unknown

    A clean house is a sign of a wasted life. ~unknown

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    Taking emergencies out of the picture, such as medical or loss of a job or some such thing, money mismanagement is the issue. People need to figure out what they can afford before they buy it. That includes college. If you're going to be saddled with so much college debt that you can't save up a $400 emergency fund, then that college or major probably isn't for you. Either pick a different college, a different major, or delay going.

    I understand that the job and housing market are far different than when I entered both. However, even when I started, I made choices that I could afford at that time. Two year tech school, waited a decade before buying a house, everything in my apartment was used and free in the beginning, roommates, extremely cheap vehicles, limited going out for entertainment or food, etc. I was fortunate to not lose my job or have a medical emergency before I had saved an emergency fund. Delaying gratification allowed me to build that emergency fund in the beginning, and hold on to it for when one did hit.

    Anecdotally, the people I see struggling financially are the ones who do whatever they want whenever they want. In the moment, I'm sure it's fun and fulfilling, but when the pendulum swings the other way, they have to scramble to figure out what to do.

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    I will try to boost my credit score. I have same history when I was going to get mortgage. I advice improve Your Debt-to-Income ratio.

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    Quote Originally Posted by Tirion View Post
    I will try to boost my credit score. I have same history when I was going to get mortgage. I advice improve Your Debt-to-Income ratio. I advice contact to professional https://www.boostcredit101.com/
    I wish you good luck!

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    I believe a large issue with this is just how slippery of a slope credit card debt is. When I moved out after getting my bachelors degree I had a small store credit card (literally $300 max and I never had more than $75 on it at that time, I got it when I was 18 to build my credit score.....I'll talk about this later) and relatively minor student loans.

    Then I got married and everything went downhill quickly in terms of debt. We were a military family moving around from place to place and we actually did pretty well for ourselves until we started this crazy idea of building my credit even more. Then we went out and got more lines of credit in both of our names. No biggie we could afford the payments no problem.

    This snowballed out of control and I added another large student loan for my masters degree maxing it each time to help pay bills (ironic right?).

    So we reached a breaking point where we simply couldn't afford anything. Bills were constantly late, etc. All of this crazy spending we were doing to "build our credit" was backfiring and now we were getting slapped with late fees and all that fun stuff.

    Now we are fighting our way out of this mess thanks to fighting for promotions, extra jobs, etc. but I do know first hand how quickly these things can happen.

    As far as the argument on if college is for everyone. Personally I believe higher education has gotten to a point it is simply un-affordable to most. My student loans rival some people's mortgage. Comparing my income to my husband who has no student loan debt and went to a trade school I make a significant amount more than him and likely always will. So its a double edge sword. I have huge student loans which I am slowly paying back BUT I make easy 3-4x the amount of my peers.

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