If you're stuck in a financial rut, here's a bit of good news for you: You can get out of it sooner than you think. But wait, here comes the bad news: You can get stuck there forever if you're not doing the right things.
To get yourself on track, the first thing you need to do is to debunk the personal finance myths that are bringing you down. Here are three of the most common:
1. "I'm in deep debt. I can't afford to have any savings."
If you have a lot of debts to pay, it's advisable to work hard towards paying them off as soon as possible - but you shouldn't do this at the expense of your own savings. If an emergency comes up and you have no money to cover it, you'll end up taking out more loans, which will bring you to deeper debt.
Start with small amounts. To make it easier, work your savings around your debt payments. A little is always better than nothing when it comes to saving up for a rainy day. It's not enough that you're paying your debts - you have to safeguard yourself from taking out more loans in the future too, especially ones that are avoidable.
2. "I must buy my own house, especially when interest rates are low."
Many people buy things just because they're discounted. That holds true for anything, from little kitschy stuff to really big-ticket items like houses. Sure, it's great to have your own home, but if you're going to end up burdening yourself with mortgage you can't really afford in the several years to come, it's better to pay rent. Renting can give you freedom that paying mortgage can't, like you can always move to another city or country if you lose your job, or you can move to a cheaper place if your income becomes smaller. In this unpredictable economy, you have to be flexible.
Once your finances have stabilized, you can start thinking about buying your own home. But don't buy a house just because the interest rates are low. It's not the price that you have to consider but your capacity to pay.
3. "I have money problems. I can't afford a financial adviser."
If it were easy to go on a diet and lose extra pounds, then nobody would be struggling with weight problems. Although some people can get into shape on their own, many can't. This is why nutritionists and personal trainers get hired all the time.
To get yourself on track, the first thing you need to do is to debunk the personal finance myths that are bringing you down. Here are three of the most common:
1. "I'm in deep debt. I can't afford to have any savings."
If you have a lot of debts to pay, it's advisable to work hard towards paying them off as soon as possible - but you shouldn't do this at the expense of your own savings. If an emergency comes up and you have no money to cover it, you'll end up taking out more loans, which will bring you to deeper debt.
Start with small amounts. To make it easier, work your savings around your debt payments. A little is always better than nothing when it comes to saving up for a rainy day. It's not enough that you're paying your debts - you have to safeguard yourself from taking out more loans in the future too, especially ones that are avoidable.
2. "I must buy my own house, especially when interest rates are low."
Many people buy things just because they're discounted. That holds true for anything, from little kitschy stuff to really big-ticket items like houses. Sure, it's great to have your own home, but if you're going to end up burdening yourself with mortgage you can't really afford in the several years to come, it's better to pay rent. Renting can give you freedom that paying mortgage can't, like you can always move to another city or country if you lose your job, or you can move to a cheaper place if your income becomes smaller. In this unpredictable economy, you have to be flexible.
Once your finances have stabilized, you can start thinking about buying your own home. But don't buy a house just because the interest rates are low. It's not the price that you have to consider but your capacity to pay.
3. "I have money problems. I can't afford a financial adviser."
If it were easy to go on a diet and lose extra pounds, then nobody would be struggling with weight problems. Although some people can get into shape on their own, many can't. This is why nutritionists and personal trainers get hired all the time.
