I don't think anyone will deny that we are currently in a recession because of our addiction to credit. As Americans, we are taught to spend, spend, spend and keep up with the Jones'. As a result, many of us are strapped or have some credit card debt. The easiest way to not create credit card debt is to not carry credit cards, but if this is out of the question, my alternative solution is to create an emergency savings account. It can be used for those big items that always get put on a credit card and sometimes stay there for years. If you have an emergency savings, when the car breaks, house leaks or you need a new appliance, no credit card is necessary.
It is important to keep in mind though that an emergency savings account is just that. It is not to buy clothes and shoes or take a night out on the town because you think you need it. An emergency savings is for a rainy day and for you to avoid going into debt at all or even further. I have had clients start their savings with $5 a week and increase it as they go. This is what you hear people call "Pay Yourself First". When you get paid, save first, and then pay bills. If you pay bills first, many times there isn't anything left because people tend to pay as much as they can towards the debt they already have. If you pay yourself first, you are giving yourself peace of mind and growing you net worth.
Once your emergency savings is built up, there won't be a need to rely on credit cards. I usually recommend having at least 3-6 months of monthly bills in cash, in an interest-bearing savings account. There are many online savings accounts that will pay you interest on your money and easily transfer to and from your bank. Whatever your current system, there is one thing for sure - If you are unhappy with your financial situation, it will not improve if you do not put time and energy towards it. An emergency savings account and paying down debt are easy solutions to take control of your finances.
For more information about Michelle, please visit her website at www.mefinancial.net or call 480.203.3880.