Friday's release of Big Bank earnings has revealed a somber picture of consumer credit health. While there's been a slight dip in credit card delinquencies, the year-over-year figures show an increase in missed and late payments. To provide guidance on preventing delinquency, Martin Lynch from the Financial Counseling Association of America joins Wealth!
Lynch emphasizes the importance of budgeting, especially for those who see credit delinquencies on the horizon. He acknowledges a common approach to budgeting, with a majority of individuals avoiding it "like the plague because they don't want to make any kind of reductions in their lifestyle." However, Lynch encourages people to see budgeting as "a tool to preserve your lifestyle."
To make budgeting more effective, Lynch advises individuals to "adopt a flexible mindset." This approach involves identifying areas where costs can be reduced, with a particular emphasis on what he calls "softer reductions." For example, cutting back on dining out can be an effective way to trim expenses.
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