Stressful Personal Finance Situations We Like To Avoid

I prefer that my personal finances be boring and uneventful. No living of the edge for us, when it comes to personal finance. Here are some of the stressful situations of personal finance we like to avoid:

Living paycheck to paycheck - According to a Careerbuilder.com survey, over 40% of people live paycheck to paycheck. In this situation, every paycheck is already committed to monthly fixed expenses, e.g. rent or mortgage, utilities, food, clothing and transportation. Typically, there isn't much money left for items such as retirement savings.

Under estimating retirement expenses - Most Americans Unprepared for Retirement shares that many people are under estimating the cost of health care during retirement. In addition, many also postpone saving with their employers plans. As a result, they are not saving enough for retirement.

Credit card debt - According to an MSN.com article by Liz Pulliam Weston about 45% of households carry credit card debt. They have a median balance of $2,200, with 8.3% of households owing $9,000 or more on their credit cards.

For us, avoiding stressful personal finance situations begins with saving and buying only want I need. These two strategies have helped us spend less than we earn and save enough to retire in our forties.

For more on The Practice of Personal Finance, check back every Wednesday for a new segment.

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This is not financial advice. Please consult a professional advisor.

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