Exploring The Elimination Of Unnecessary Spending And On Cost Saving Alternatives

O’Donnell’s essay explored the opposite of Scurlock’s, his essay was geared more towards the fact of not owning a credit card prior to entering the professional world. He explored his point through an educated professional man, who was constantly denied an unsecured credit card in spite of having a full time employment, no monthly house payments, no finances owed to other lenders and no dependents that need to be taken care of.

Richard Fairbank and Nigel Morris, both diligent entrepreneurs, started laying the bricks for their eventual successful company, Capital One, in the late 1980’s. They both worked in the Virginia-based “Signet Bank”. Fairbank started noticing trends in the financial industry that he felt Signet was missing out on. These opportunities were in the credit card industry. He, as well as all of Signet Bank knew that the credit card industry was very risky, but Fairbank was ready to take a chance in this, what can be, highly profitable field.

In regard to saving money, I have found that one of the simplest deals by taking back control over the credit card companies. Faster than expected, credit card debt accumulates quickly. Each purchase on a credit card is not limited to the price on the sales tag, when the entire purchase price is unpaid on the subsequent bill. Be realistic with your purchases. When living on a cash budget, discuss how much “ money is ‘available’ ” for spending as well as how often that amount is withdrawn (Do You Know Where Your Money Is). Avoid signing up for another credit cards when contemplating how to handle expenses. While it may appear that paying off one credit card with another would make it more manageable, it is only compounding the problem. In order to determine spending allowance to pay off debt, I recommend to construct an excel document of the expenses for each month.

The Federal Reserve statistics indicate that the average U.S. household has a credit card balance of $7,283 while the average indebted household has an outstanding balance of $15,611 (Bricker, et al., 2014). Only home mortgages and student loans exceed credit card balances. If consumers hope to create an appropriate level of wealth to support themselves in the latter years of life and avoid counting on government programs as their primary source of income, consumers will need to save more of their income. Servicing credit card debt required approximately 13.9% of consumer’s disposable income in the fourth quarter of 2008 (Wilcox, Block, & Eisenstein, 2011). If these dollars were available as contributions into a retirement account on behalf of the consumer, countless people would be confident about their ability to save for an appropriate lifestyle in retirement. The abuse of credit card usage may be caused by a lack of spending discipline, lack of information or a lack of financial literacy, or a combination of the three. These shortfalls are examined to determine if policy makers can intervene to motivate consumers to generate improved decisions regarding the use of credit cards. The first step in this process is having a basic understanding or knowledge of financial matters. The need for improving financial literacy in America continues to grow as financial products and services continue to become evolve in complexity. The Great Recession has recently proved that financial literacy in this country has room for improvement at all economic levels. The CARD Act required The Secretary of Education and the Director of the Office of Financial Education of the Department of the Treasury to coordinate with the President’s Advisory Council on Financial Literacy to develop a strategic plan to improve, expand and support financial

Last but the most effective strategy is the CREDIT DEBT MANAGEMENT. Learn to set up your budget in the most appropriate way. Create a monthly or weekly plan of the expenditures and then proceed. Ignore the secondary elements; pay your key focus on the primary ones. If you have multiple credit cards, then start with the one, for which minimum amount of payment has to be paid. And, then proceed accordingly.

Before the causes and resolutions are discussed, debt must be understood. Terry Herman, a financial advisor for Edward Jones, expresses this definition: “Simply put, debt is a product bought or a service utilized that you still have a financial obligation to” (Herman). To further that definition, debt is the borrowing of money with the entitlement of repayment with interest; this explains the financial obligation Herman expressed. While family members and friends may not enforce interest, interest would not demean the situation. The current consumer-driven culture has significantly increased the amount of personal debt from decades ago. A chart derived from statistics collected by the Federal Reserve and Bureau of Labor Statistics displays the climb of debt from $1,186 per person in 1948 to $10,168 in 2010 (Indiviglio). As shown, the increase over 62 years is approaching a factor by the multiple of nine. Consumers are clearly spending irresponsibly, which Herman manipulated into the “complete difference between an investment and expenditure” (Herman). An investment is something expected to obtain an additional value while an expenditure is unnecessary spending. Thus, consumers must be acquiring expenditures more frequently than investments.

The government has ensured the money will be repaid through the wage garnishment system. Only a small percentage of consumers endure this process because debt can be collected by numerous means (Arnold). In response, credit debt was virtually non-existent until 1970, now Americans have an average of $3,500. A time used to exist where only the wealthy had access to credit cards, but the credit score industry caused financial companies to feel comfortable with the broadening of credit cards across the population (Indiviglio). Letting consumers purchase those big-ticket items also enables them the ability to spend more holistically. For example, $20 cash is manageable for a few groceries, but a credit card can cover those groceries and a new television simultaneously. Credit cards seem to give consumers an infinite amount of money at their fingertips. After so much debt has risen, creditors resort to the courts. Over a million lawsuits are filed annually concerning credit card debt, which does not seem like a small percentage (Arnold). And through wage garnishment, creditors collect their payment whether the consumer can afford it or not. The consumers should not be treated in this manner for using a credit card in the means that it was distributed for.

For those who have massive credit card debts under their belts and would like to see that amount dwindle away to nothing, there are quite a number of ways to reduce credit card debts. Well there are two most important things of course such as you having both the commitment and willingness to see that the problem gets solved. This also helps reducing credit card debt so much easier in the process.

It is true that debt bogs most of us down but now there are many smart ways of managing your credit card debt in a way that it cannot get the better of

1. Repay as quickly as you can - this is the best way to pay down any kind of debt. If you are working, set aside as much as you can afford and put it towards paying back what you owe. This will require commitment from you: it will only be too easy to spend extra cash on things you like but putting it instead towards your debt repayment

The next important part of your financial game plan is to set goals. Your goals should be realistic and fit your current situation. If you’re buried in personal debt, then your goal should not be “I’m want to get out of debt.” There are generally many layers to a person’s personal debt; so a better goal would be paying off a credit card and then moving on to another debt. When you set very specific goals it becomes very easy to gauge your progress by how far you are along on your

It's common that college students take credit card debt. Some are concerned about this fact in that graduates will face the harsh financial crisis for their low salaries and high debt. Nevertheless, others presume that it's a good start for college students to take up credit business. In my opinion, credit card debt can harm them for leading to the unreasonable consumption and harsh financial problems in the future.

Whilst a critical part of consumer spending, credit card companies are constantly accused of malicious legal contracts and schemes to increase profits. Without heavy regulation, these companies have the power to bankrupt millions of Americans that rely on credit cards in their daily lives. However, after the introduction of The Credit Card Act of 2009, these accusations represent an inability to accept responsibility for financial blunders on the consumer’s behalf. Due largely in part to the government’s strict regulations, credit card companies should not be at fault for the student credit card debt crisis. Credit card companies remain blameless for student credit card debt as a result of

Find out what the minimum balance is for each debt. Be faithful and pay the minimum. However, you want to put a lot of momentum toward the smallest debt. Find different ways to come up with the money. You can take up a few side gigs like babysitting, cleaning or dog-walking. Sell items you don't need and get creative to come up with the cash to eliminate the smallest

The most effective way to reduce the amount of money you spend each month is to cut what cheat you do not need. The more money you spend on things you do not need the less money you have to make payments which causes your interest to go up. If you could write what you do not need you will have extra money left over to help your payments.