The tradition of watching It’s a Wonderful Life did not seem quite so wonderful tonight. Although your husband has always enjoyed watching good old George Bailey muddle his way through a financial mess, this did not seem like ht year to watch someone consider suicide. In a year when your husband has confided that he is certain he will be fired, you do not know that you can find the courage to watch this show about nearing the end of a financial rope. In spite of the fact that your husband has brought up the idea of taking out a home equity line of credit (HELOC), you still are not sure that you are going to be able to make it through these first four months of the year. With car insurance due, health insurance threatened, and college tuition payments piling up, this time the financial mountain seems nearly impossible to climb.
From overdrawn checking accounts to the decision to apply for a loan or HELOC, there are many financial decisions that can require years to recover from.
Over Extended Credit Cards and Late Payments Are a Threat to Your Way of Life
The holidays are supposed to be one of the happiest times of the year, but the fact of the matter is that in today’s stagnant economy it is important to know that some people are not able to find anything to smile about. And while the decision to apply for loans at a conventional bank is not a bad one, making the decision to apply for HELOC can lead you to even greater financial problems.
Unfortunately, the holidays are just one more time when families overextend themselves, sometimes even maxing out their credit cards. Taking the next 11 months to pay off the gift giving of one single holiday is not important. Consider some of these facts and figures about the many credit situations that cause many Americans to live a life that is not as WONDERFUL as can be:
- We live in a society where consumerism is contagious. As a result many Americans live under the weight of overwhelming credit card debt and high interest payment plans.
- Owning a home is a dream of many Americans, so it should come as no surprise that as many as 88% of home buyers have a mortgage that they owe on.
- New home loans are often available at a pretty good interest rate, but you when you require a second mortgage on your home the rates are rarely as friendly.
- Different kinds of banks offer different kinds of services. For instance, patrons are twice as likely to find free checking at a credit union than other financial institutions.
- Equity in a home can work in your favor if you find the right kind of deal on a second mortgage. This can be problematic if you simply use the money to pay off credit cards that you max out again.
- Research indicates that seven in 10 people have at least one credit card.
- Few checking and savings accounts are available with different kinds of options, so it is important to explore the offerings and limitations that are available at your institution.
- Unpaid credit card bills continue to accumulate interest charges and can lead to a lowering of your credit score, limiting the kinds of loans you will have access you may have for future financial options.
- Late payments, whether they are on a loan or a credit card, can lead to a dangerous spiral that can take you years to recover from.
If you fear that you are living anything but a wonderful life, it might be time to decide to reign in your typical spending or to consider applying for a HELOC. Checking accounts, savings accounts, and mortgages are a way of life for many people, but it is important to realize that the lower your overall debt can limit the future problems that you want to have. Not every part of life is ever going to be WONDERFUL, but if you are careful with your finances you may find that the day to day stresses are easier to handle.
What are your financial goals for the new year and this next decade?