3 Middle Class Debt Traps

If you are living paycheck to paycheck on a household income of more than $100,000, you are in a better financial position than many.  It certainly beats having a lower household income and not even being able to keep up with your bills.  The reason that so many gainfully employed people find their entire paychecks going to bills and minimum payments on debts is partly for society-wide factors such as mind-bogglingly expensive healthcare and unaffordable prices on necessities like groceries and gasoline.  No debt relief lawyer will ever blame you for getting into debt, because either your financial crisis happened for reasons beyond your control, or it was because of a financial mistake that you have since learned from.  When you have the kind of debts that it is possible to incur with an above average credit score, some of your debt problems are due to preventable mistakes involving borrowing and repayment.  To find out how to avoid these mistakes or to pay off the debts you have incurred because of them, contact a Plantation debt lawyer.

Mistaking a Positive Checking Account Balance for Prosperity

If you have a checking account, you should be grateful, and if you regularly deposit employment into it, you have a reason to smile.  If there is a surplus of money left in your checking account each period after you have paid your bills and made the minimum payments on your debts, this is a reason to celebrate.  A budget surplus can be dangerous when it sits around in your checking account, though.  That extra money can too easily burn a hole in your pocket.  Instead of leaving it in your checking account where you can spend it carelessly, you should transfer it into savings or put it toward a debt repayment snowball or debt repayment avalanche.

Assuming That Anything With an Affordable Monthly Payment Is Good for Your Finances

Car loan debt is at an all-time high, and not only because of the high cost of vehicles.  These days, it is nothing out of the ordinary to see car loans with a repayment term of seven years.  It seems like a bargain to drive a shiny new ride for only $700 per month, but if you calculate $700 per month times seven years, it comes out to much more than the amount that you financed when you bought the car.

The Conspicuous Consumerism Treadmill

The worst is when one big purchase justifies another.  You qualify for a mortgage on a house with a two-car garage, so you buy a second car.  Your house is on a lake, so you buy a boat.  It’s great that you qualify to finance all these purchases, but keeping up with the loan payments on all of them is no fun.

Work With a Debt Lawyer About Paying Down Preventable Your Debts

A South Florida debt lawyer can help you pay off the loans that seemed so affordable when you borrowed them.  Contact Nowack & Olson, PLLC in Plantation, Florida to discuss your case.

Source:

finance.yahoo.com/news/ramit-sethi-3-signs-unsavvy-120027512.html