There are three types of financial circumstances most people in Tennessee may find themselves in that may not be defined as a crisis. The most common of these three is living from paycheck to paycheck. The second most common scenario is when you need some money but you don’t have any, which compels you to borrow. The third most common scenario is failing to repay a debt. Those who are broke, unemployed people without insurance, those who go bankrupt or anyone with a severe financial problem that is beyond contemplation are effectively in a crisis. Those living at or below the poverty line would also need a long term solution and not stopgap measures.
As an average citizen, you would want to be free from all kinds of debt. Unfortunately, credit card bills, recurring commitments including monthly expenses, financial surprises and probable setbacks at work or in personal life can lead to debt. Not all debts are a vicious cycle but many find it difficult to emerge from piling debts unscathed. Many people take a lot of time to manage and be free of your debts. This reduces the likelihood of living debt-free in Tennessee.
- The first step to live debt-free in Tennessee is to have a budget. The budget could be monthly, fortnightly or weekly. You may even have a daily budget. According to Titlelo.com, a majority of Americans do not have a stringent budget. This is true for Tennessee as well. While everyone knows how much they earn and that they should save some money every month, very few people actually hold back the reins to cut down on spending. The only way to have a firm grip on spending is to have a budget. You must know exactly how much money you are spending in what or where and accordingly you must review your financial decisions. The reason most people live from paycheck to paycheck and hence need to borrow during a slump is the lack of savings and that is directly related to spending habits. A budget will resolve this problem.
- Those who already have debts must consider consolidation. If it is just one debt, then the focus has to be completely repayment. Consolidation is only relevant when there are multiple debts. Managing several debts will be daunting for anyone with a fixed limited income. Unless you have the possibility of a windfall gain in the near future, you should always go for debt consolidation. Make sure you pay a lower rate of interest on a consolidated debt. You should also get favorable repayment terms. Do not simply consolidate all debts into one large debt that would still be unmanageable.
- Breaking the cycle of debt is necessary if you want to live debt-free in Tennessee. You can always borrow some money to repay an existing loan. However, this does not really help you to be free of debt. Whether you borrow from a bank using a secured loan or you go for unsecured loans, both would still require you to rearrange your financial commitments and this would not have any bearing on your income or savings. You will always fall behind a debt if you don’t have more money to spare. The only way to make room for such savings is to cut down on expenses or to increase your income. You should aim for both. A substantial increase in income or viable austerity can help you to have the cash you need to be free of existing debt.
Most Americans have some recurring expenses that are absolutely avoidable, such as subscriptions that one keeps paying for but does not really need to. Paying higher prices for services or products when there is a way to save is also against the fundamental grain of pragmatism. Many people do not review their postpaid plans, many keep paying higher tariffs, some people never explore coupons or discounts and there are many such financially unwise moves that residents across the state keep indulging in. Financial mismanagement is the most common reason for incurring debts. One has to be completely organized and have absolute control of their finances pertaining to everything that is predictable or expected. There would still be unexpected developments but you would be better prepared if you manage the expected scenarios perfectly.
