In the United States, we are a country awash in poor management of our money. We have, as a nation, some of the highest amounts of debt per person, and I’m not just talking about our government debt, which is nearing seventeen trillion dollars even as I write these words. However, it’s of our personal finances that I’d like to talk today.
Our personal finances being as terrible as they are is the result of a series of things coming together to create the perfect storm of bad budgetary and fiscal policy for the individual. To begin with, there’s the fact that we spend a lot of money on things we don’t need, or on more expensive but less time consuming things like fast food rather than actually cooking at home. This can be explained away in some cases, but in others, it’s just bad policy, but that isn’t the worst of it. We also don’t like to wait to get the things that we want; rather, we want them right now, this very minute. We’re not big on delayed gratification. That’s why there are entire stores built around the idea of selling you something on an installment plan, where you pay me so much up front, and then pay the rest over time, and the amount you’re paying, in total, is a lot more than you would pay if you were, for example, to buy something up front with cash in hand.
So, what can we do to get our budgets under control, and to begin to make better fiscal decisions? We can seek out the help and advice of local accounting firms which can help us to better manage our money and the way that we spend it. Here’s just two reasons to do so.
1. Pay off debts
One of the most important things to do in order to get yourself on the road to good financial standing is to pay off your debts. I truly cannot stress this enough, and I don’t believe that there’s any personal finance accounting advisors in this country who would disagree with that statement.
It has been said before that having a little bit of debt is a good thing. This can be true, if you’re talking about making a small purchase or two a month on a credit card and then paying it off in full at the end of the month. These purchases need to remain well under a third of the value of your credit card, though, and to be paid off, in full, at the end of the month for that to be true. In any other case, it’s an outright lie.
The longer you have a debt, the more interest it accrues, and the more money you’re going to end up paying in order to service not just the debt, but the interest it’s been gathering. The best thing that you can do is to pay it off as quickly as possible, and your local CPA accounting advisors are well equipped to help you find the quickest way to pay it off so that you can spend your money on more important things. Things like, say, a retirement account.
2. Save for retirement or other things
Did you know that less than half of the people in the United States have any savings to speak of? What I mean by this is that they have, combined, in all their savings accounts, in all their retirement accounts, and in their stock portfolios, less than ten thousand dollars. That isn’t enough for you to do pretty much anything with, if you were to be forced to live off it. For a lot of people, that’s something like four months to six months worth of living expenses, and then you’re pretty much done.
Which is really rough, because you’re going to end up wanting to live for about twenty to thirty years at least, after you quit working in your fifties or sixties. This means you’re going to need about thirty thousand dollars a year for that whole time, and you can’t just rely on the government to hand over that kind of money to you year after year. You’re going to need to save, to invest, and most importantly, to budget your money, and an accounting firm is going to be able to help you do this as best as possible.
So, if you’re having trouble with your money, if you’re having trouble with making sure that you can put some money into your bank every month, hire an accountant to help. You won’t regret it.