Beware of Financial Traps

"Damn. Where is all my money going?"

That's what he thought as he peeked at his bank balance. It could only be described as peeking because he only looked at it seldomly, embarrassed by its meager size.?

Joe was a good guy. He had a good job in marketing for a small manufacturing company. Joe was a personable guy, honest and upfront with his co-workers, friends and family. He and his wife had two young children, so his wife was a stay-at-home mom.?

They seemed to live paycheck to paycheck. Even with Joe’s annual raise, they couldn’t keep up with the mortgage, credit card bills, car payments, etc.?

What Joe didn’t realize was that he had a problem.?

And the problem was Joe had fallen into a financial trap.

Financial Traps Don’t Let Go Easily

What was Joe’s problem? Well, he had several.

His credit score was not good. His balances were too high on his credit cards. He sometimes missed payments on his credit cards or other loans. Consequently, his credit score was not good. That meant that anytime he got a loan, the interest rate the loan company charged him was higher.?

Joe had to get more disciplined. He had to make sure he made loan payments on time to improve his credit score.?

And he had too many loans. He got in the habit of increasing the existing loans, or getting new ones, when he got raises at work. One of his problems was that he equated his income as a sign of his financial health. However, you can’t measure your financial success by simply looking at your income.?

Unfortunately, Joe’s mindset when he got a raise was, “I have more money now. I can buy more things.”

What Joe should have been doing was taking part of his income and paying down the outstanding loan balances. Start with the loans charging the highest interest and work down.?

And he should stop increasing debt when he increases his income.

Anyone Can Avoid Financial Traps

Curtis Banks found financial freedom-but it took a while. He knows what people like Joe go through since he had the same experiences early in his professional career.

Curtis is a Financial Educator and Wealth Mentor. He founded Money Smart Education in 2017. He helps his clients get out of debt, build generational wealth and achieve financial freedom.?

If you need help getting out of the living paycheck to paycheck rut, give Curtis a call at 469-590-801. Or you can connect with him here or get on his calendar at https://www.scheduleyou.in/iZ2VshWLS.