Business Fit Magazine January 2019 Issue 1 | Page 37

2 – Build an Emergency Fund:
Create an emergency fund so you’re always
prepared for the unexpected. Ideally, you
should save six to 12 months of living expenses,
but if that’s a lot for you, set a goal of saving
of a least €1,000. The best way to start saving
is to set up an automatic savings plan that
transfers directly from your current account
into your savings account. You can even start
with as little €25.
3 – Minimise the Credit Card Use:
Take control of your credit card spending. To
do this, think before you buy. Before making a
purchase, ask yourself, “Do I really need this?”
Make some calculations before using your
credit card and wait until you have the cash
instead. Studies show people spend almost
47% more when purchasing with credit cards
instead of cash.
4 – Reconsider Student Loan
Amounts:
Be smart. Avoid taking out student loans to
the maximum or borrow as little as possible.
Students who borrow to the maximum amount
tend to struggle to make the payments later
on. Starting your career with student loan
debt can halt your ability to save, invest and
purchase important things – like buying your
first home.
5 – Don’t Borrow Money to Get
Out of Debt:
Consolidating your debts into a minimum
payment can be the perfect financial move,
but be careful not to accrue more debt than
you can handle. After consolidating your
debts, avoid getting more and don’t create
any unnecessary or new debt. Organise your
expenses and try to pay debt as soon as
possible.
6 – Never Co-Sign a Loan:
Never co-sign a loan for a friend or family
member unless you are ready to take financial
responsibility for the loan if the person you co-
sign for is unable to pay you back. Even with
the best intentions, it can ruin your finances
and even relationships.
7 – Avoid Payday Loans:
Do not take out payday loans to cover a bad
financial situation. A payday loan can be
approved in minutes and you get the cash fast.
While they are tempting to use to cover your
immediate expenses, the interest rates are
usually high, even up to 35%, and you can fall
into a trap of acquiring a new one each month
to cover your debts temporarily.
8 – Avoid Including Debt from
Your Old Car Loan to a New Car
Loan:
Including a debt to a new loan is a serious
mistake. Due to the rapid depreciation of cars,
dealers receive your car for a lower price than
the market value and include the negative
balance into the loan of your new car. You will
owe more on your car than it is worth, so you
have negative equity. So, try to sell your car
separately or pay off the loan for your old car
before you get a loan for your new car.
9 – Don’t Ignore Your Debts:
Ignoring your debts does not make them
disappear. Doing this means higher interest
rates and surcharges, court demands, accruing
bad credit and even wage garnishment. Take
your debts and get help now if you do not
know what to do.
I hope these tips help you start the new year
off on the right foot. Let’s make 2019 the year
we avoid or eliminate our debt!
Alexandra Ramirez, is the Financial Expert of the TV Shows "Despierta
América" & "Primer Impacto" of Univision TV, the No. 1 shows among
Hispanics in US. TOP USA Latina Influencer, one of the most recognizable
finance experts in the United States, prestigious international speaker, and
best selling author of "Conquista tu Riqueza Financiera en 21 Días".
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