Personal Money Management: What You Need to Know

The average American doesn’t have a high degree of financial literacy – it is estimated that one-third of American adults cannot pass a basic financial literacy test. While much of our lives is devoted to earning and spending money, many of us are unfamiliar with the fundamental economic dynamics that can help us achieve our financial goals over time.
Here are a few important concepts you must know if you are going to manage your finances – and your debts – effectively and responsibly.

What is the value of your assets?

Your assets are anything that you own that has significant monetary value. The most common assets include the money in checking, savings, investment, and retirement accounts; homes and other real estate; cars; and precious medals.
Some people have alternative assets which may have substantial value, such as works of art, jewelry, and collectibles. It is very important to have such valuables periodically professionally appraised, so that their provenance, authenticity, and market value can be assessed and verified.

What is your net worth?

Net worth is the total amount of funds you possess after you deduct your total debts (mortgage, credit card, student loans, personal loans, car loans, etc.) from your assets. A significant percentage of Americans have a negative net worth, meaning that even if they were to liquidate all of their assets, the amount would still be lower than the amount they owe.

What is your net income?

Your net income is the money you take home after tax, insurance, and investment deductions.

Do your debt balances check out?

A surprising number of people with credit card debt do not check their monthly statements to make sure that their debt is diminishing – they simply make their minimum payments. It is important to know how your payments affect your balance if you are going to make progress in clearing your debts. You should check your debt balances at least on a monthly basis, to make sure that your loan repayments are being posted correctly, and that you understand the fee structures for all of your loans. Staying on top of your debt balance is essential to maintaining control of your debts.

What are all of your general expenses?

You cannot set an effective budget without knowing exactly how your money is being spent and (roughly) how you are going to spend your money in the near future. Start with your essential monthly expenses (utilities, rent, groceries, childcare, medication, insurance, phone/internet, gas/transportation, loan repayments) go on to list bi-monthly or infrequent expenses (property taxes, clothing, home maintenance, and repairs) and non-essentials (entertainment, restaurants, luxury items).
You can keep an Excel budget sheet or use a budgeting app to help you keep track.
While personal finance is a complex subject, these are the foundational issues that must be addressed before any significant progress can be made in debt reduction. You may discover that some lifestyle adjustments and vigilance are all you need to clear your debts quickly; you may also find that you need extra help managing your debts.

Americor: Helping borrowers resolve their debt obligations safely and quickly.

If you need help taking charge of your financial situation, Americor offers lending solutions and debt consolidation services that may give you the support you need to address your financial difficulties. Please contact the team at Americor to learn how you can restore your financial security.

The Illusion of Free Money Syndrome – Are You Suffering From It?

Credit cards are a fantastic resource for individuals and families who find themselves unable to afford a necessary expense, but for many Americans, credit card purchases are more of a habit than a strategic solution. Research has shown that consumers are more free with credit card spending than they are with cash – resulting in the $1 trillion U.S. credit card debt and rising default rate. Are you relying too heavily on credit cards? Here’s how to tell.

You buy things using your credit card that you wouldn’t with cash.

While there are numerous credit card use mistakes borrowers make when they are in over their heads, this is one of the first indicators that you aren’t being responsible with your credit card. If you find yourself making impulse purchases, or purchasing things before you can officially afford them, you are digging yourself into a major financial hole.

You’ve maxed out one or more credit cards.

If you can’t pay off your credit card charges every month, you are spending far more than you can afford.

You’re making purchases specifically for the “rewards.”

Many rewards card-holders don’t realize that they’re spending more money than they otherwise would by making purchases in order to maximize their “points” or accumulate free air miles (or whatever benefit your card issuer offers). If you’re charging more for cash back benefits than what you would spend in cash, your rewards are likely minimal or even non-existent in the long run.

If you find that you’ve amassed more credit card debt than you can currently handle, debt consolidation solutions may help you reduce your overall monthly payment obligation and clear your debt quickly. Americor gives borrowers flexible and responsible debt management strategies designed to help restore their credit and get their financial circumstances back under their control. If you have credit card debt that is becoming more and more difficult for you to manage, visit Americor.com today.

Top 3 Causes of Credit Card Debt

Credit cards are ubiquitous – every adult in the U.S. has approximately 3 credit card accounts. While credit cards are extremely helpful in giving holders purchasing power that exceeds their economic status, it’s that excessive purchasing power that frequently gets those card holders in hot water. Here are the top three reasons why people find themselves in significant credit card debt.

Card holders treat credit as an additional source of income.

When people rely solely upon credit cards for basic purchases – groceries, car payments, etc. – problems are sure to arise. Having credit can be a life-saver when we find ourselves in temporary financial hardships, but it is no substitute for actual income. If you simply don’t have the income to offset your credit card purchases, you are going to find yourself carrying unmanageable debt.

Card holders don’t keep track of their credit card statements.

Having multiple credit cards that aren’t specifically designated for individual purposes (one exclusively for groceries, one for emergencies, etc.) can be very risky, particularly if you aren’t budgeting properly. One of the most common reason credit card holders find themselves in debt is because they lose track of their multiple payment obligations. Having more than one credit card can be beneficial – it may increase your credit score, and you maximize your rewards benefits – but maxing out several cards can only hurt you in the long run.

Card holders don’t read/understand the terms.

This is a significant problem for people who take out credit cards when they’re very young, don’t know anything about finance, and don’t understand the finer points of their credit card agreements. Failing to acknowledge fees, high interest rates, and taking out cash advances can leave you facing charges that you never anticipated.

Americor is America’s leading debt management service provider, helping thousands of borrowers reconcile their credit card debts quickly and responsibly. For more information about how Americor can help you resolve your outstanding debts, please visit Americor.com.