The American people are saddled with personal debt. In fact, total consumer debt increased to over $14 trillion. The average person holds over $90,000 of personal debt.
Personal debt is driven by many noble purchases like mortgages and student loans. However, being in debt prevents you from achieving financial independence and monetary comfort.
Instead of financing, the best strategy is to save and buy with cash. Read on to learn why you need a budget planner for your next big purchase. Explore five reasons why budget planners can improve your financial condition.
- Save on Interest
Accrued interest is how lenders earn a profit on a loan. Consider the monthly interest when you buy a house.
For the next 30 years, you will be paying hundreds per month on interest. Outside of a mortgage interest deduction on your income taxes, there are no benefits to paying interest.
A budgetary planner can help you save large sums of money to avoid interest. Keeping monthly interest off of the expenses column in your monthly budget is certain to pay off.
- Control Your Spending
A budgetary planner will also help you control monthly spending. A shocking number of Americans do not realize how much they spend on non-essential items.
Did you know that roughly one-third of Americans spend more on coffees than investing? Take that $5 daily Starbucks latte as an example.
Your morning coffee stop is costing you at least $35 per week. This adds up to $140 per month and $1,680 per year. You could save thousands by making your coffee at home instead.
A financial planner will help you identify and eliminate unnecessary expenses. Over time, you will save thousands to make large down payments or buy items with cash.
- Help You Invest
Far too many Americans are failing to save for retirement. Stunningly, one-quarter of all Americans do not have any retirement savings.
Very few people want to work until they die. A planner can help find room in your monthly budget to invest in a 401(k) or IRA.
- Give You Planning Tools
Budgetary planners have access to tools that can help you make sound financial decisions. For example, they will show you how to use a mortgage calculator.
This will show you how much each payment contributes to equity and interest. It will also fold in property taxes so that you have a complete picture.
There are many other tools that planners want to share. These tools include trackers for college savings and monthly spending.
- Estimate Big Purchases
For accurate budgeting, you need a good cost estimate. Budgetary planners can help you estimate how much something will cost.
They have a wealth of experience and many other clients that they service. Planners draw on this experience to give you accurate cost estimates to help you budget.
A Recap of Why You Need a Budget Planner
Do not make the same financial mistakes that plague millions of Americans. Instead of getting buried with interest expenses, you should be saving cash for the next big purchase.
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