Budgeting
2
pay back the borrowed money. Some common reasons to take out a loan are for a mortgage payment, transportation or furthering your education. However, you can be in some trouble if you don’t know what to look for. Interest rates are the big thing to watch for. Any interest rate means you have to pay back much more than the initial amount. Also, different types of interest like fixed rate (never changes) and flexible rate (changes with inflation) can be something to look for. Fixed rates are always best. Lately, interest rates have been so high banks have had to extend the height of their ceilings. This shows that if not looked after, they can be dangerous.
So, is lack of budgeting the root of personal debt? Yes, however there can be other reasons for personal debt. Being inexperienced with your money and expenses that you don’t expect can also be factors of personal debt. So is budgeting a good idea? Yes, of course. You can gain so many positives from budgeting: you can build your savings, be free from worry, and stay out of debt. Budgeting is something to consider, especially with college expenses coming up. The next step is to talk to a financial advisor and see how budgeting can benefit you.