Published On: Fri, Nov 13th, 2020

Financial Advice for 3 Life Scenarios

The internet is filled with advice on every possible topic imaginable, chief among them, financial advice. From debt relief how-tos and frugality strategies to investment guidance and everything in-between, one can learn all about finance if they’re motivated enough.

photo/ Michael Jarmoluk via pixabay

However, what about breaking down advice based on the financial situation you’re currently facing?

After all, financial advice isn’t a blanket concept; certain options make more sense for some situations but not others. Although in saying this, going to see a profession like Oak Financial Planners, will be a sure-fire way to ensure you get yourself out of any tricky financial situations.

For the purpose of clarity, we’ll treat debt references in this article as strictly related to credit card debt.

Without further ado, let’s look at three types of financial scenarios and what one can do for each.

You Have A Lot of Personal Debt

Dealing with crippling debt is one of the most stressful experiences one can go through. Debt relentlessly infiltrates thoughts and decisions to no end, often causing us to be so overwhelmed that we sit frozen. But being inactive is the worst thing you can do. Your debt will only get worse without actionable measures. To start, sit down and calculate exactly how much you owe. It’ll be painful, but it’s the only way to move forward. Next, cut up your credit cards. They won’t serve any purpose in this next chapter of your life.

If you have friends and family that can help, it’s worth asking them for help. You might have to swallow your pride a little but paying them back is a lot better than continuing to accrue crippling interest rates. If all else fails, you can seek out debt relief providers. Given that the average American household with credit card debt carries has a balance of nearly $16,000, many companies like Freedom Debt Relief are trying to ease this burden. Depending on how much debt you have, you’ll be a candidate for debt consolidation or debt settlement.

photo/ Rudy and Peter Skitterians

You Have Some Personal Debt

In our current society, having some debt is normal. But continuing to carry that debt shouldn’t be something you’re OK with. You can probably testify that your debt has already kept you from taking a desirable vacation, investing in your future or allowing you to further pursue a costly hobby. But it doesn’t need to be this way. Know how much you owe and prioritize paying that debt off.

Start a freelance hustle, sell things you no longer need, cancel subscriptions or memberships you’re not using, meal prep, practice “it’s the thought that counts” with holiday or birthday gift-giving, shop at thrift stores, coupon, etc. Any money saved or generated from the above measures should be thrown directly at your outstanding balances. Before you know it, your debt will be gone and you’ll have established solid foundational practices or cleansed wasteful behavior in your personal life. Pretty much the contextual definition of a win-win.

You Have No Debt

Having no debt presents you with a whirlwind of financial opportunities. While you might feel like you have all the freedom in the world with your spending power, don’t fall into the disposable income trap. Just because you have no debt and income to potentially be spent any way you please don’t mean you should exercise that freedom.

This is the time to use your situation to your advantage. Consider some (or all) of the following options:

  • Build up your emergency fund; put it in a money market savings account.
  • Invest in companies’ stocks you use and believe in.
  • Start a CD ladder.
  • Contribute to an IRA and/or 401k.
  • Donate to nonprofits that resonate with you.
  • Fund a side passion/hobby/side business.
  • Consider other alternative revenue streams to diversify your income.

Financial advice can be tricky and confusing, so much so that it causes people to feel overwhelmed and not do anything at all. Come to terms with your financial situation and prioritize what’s needed to achieve a financially healthy life. With a little planning, diligence and self-encouragement, you can get there. Good luck!

Author: Kayla Eric

Image/bykst via pixabay

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  1. […] mountain without a little help along the way. Be willing to listen to what others have to say about financial advice and time management, for instance. It just may help you out of a jam one […]

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