3 Outdated Assumptions About Personal Finance
The world is changing quickly, and it seems like every change brings greater financial stress. With high prices, stagnant wages, and eroding job stability, where do you turn for financial advice? Some of the personal finance aphorisms that were axiomatic a generation ago no longer hold water today. If you need help strategizing about how to manage your debts in chaotic times, contact a Boca Raton debt lawyer.
Paying in Installments Builds Creditworthiness
In the old days, your elders would encourage you to get a credit card so you could build your creditworthiness. When you maxed it out, you would reassure them that, since you were still making payments, you were still building creditworthiness. These days, you still borrow beyond your credit limit, but the details are different. Ever since you maxed out your credit card, buy now pay later (BNPL) is your go to strategy. It doesn’t build creditworthiness; it is more like layaway, except for a generation raised on instant gratification.
Cash Is the Fastest Way to Pay in an Emergency
Millennials felt grown up when we amassed a cash emergency fund. When an emergency arose, we could simply pay the emergency expense, while keeping the money in our bank account for recurring bills. Even better, if our cash went to fix someone else’s emergency, we could hand our emergency cash to a friend in need or send it by Western Union or MoneyGram to a relative out of town; in South Florida, an adult is a person who sends remittances.
You never felt old until your niece called you about a financial emergency, and you said you would be there in 30 minutes to hand her the cash from your emergency fund, and she sighed in exasperation. To you, it sounded like, “But I want an Oompa-Loompa now!” but the young generation sends money instantly through Venmo and Zelle.
Money in a Savings Account Will Grow
One of your elderly relatives might keep money in a piggy bank or under the mattress in case, and she might insist that it is safer that way, since the bank might collapse. Your protests that the cash is not safe from burglars did not convince her. Today, there is yet another worry. Your money is not really safe under the mattress or in a savings account. In the old days, savings accounts earned substantial interest, and you could leave the money in there for years and let the interest compound until you felt wealthy. Today, the purchasing power of your money is plummeting before your eyes. The $100 bill you withdrew from the bank on your last payday can buy less than it did when you retrieved it from the ATM. Savings rates are not even high enough to keep up with inflation. Yes, saving money is safer than spending it, but price increases mean that no one has enough money, no matter where you keep it.
Work With a Debt Lawyer About Getting Out of Debt in a World Where Nothing Makes Sense
A South Florida debt lawyer can help you if it feels like your debts keep getting bigger while your purchasing power is shrinking by the day. Contact Nowack & Olson, PLLC in Plantation, Florida to discuss your case.
Source:
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