A large home or “McMansion” is often seen as an American status symbol, a supersized American dream. For many, it’s a sign of success, but appearances can be deceiving. Living the luxurious lifestyle can cause major financial strain, especially if your income and budget are not equipped to handle the costs. Borrowing beyond your means can lead to serious consequences, including:
- An overextended debt-to-income ratio and credit utilization ratio
- The inability to save for emergencies and retirement
- A failed budget
- High credit card balances
- Long-term credit damage
If living large is putting you out of your means, it probably means it isn’t worth it. Here are three questions to ask yourself as your shop for a new property that may help you avoid major problems in the future.
If you’re retired, your income and wealth are probably at comfortable levels and credit may be in the back of your mind. However, credit is still important for you — it determines what you pay for insurance, if you can lease easily, or turn on utilities without substantial down payments and whether credit card issuers will keep credit limits at current levels.
Here are five things you can do to help maintain your credit health.
It’s no secret that kids are expensive, and that can be especially true during back-to-school time. While you may be excited about their return to class, the additional costs of education could cost you more than a few dollars — and credit score points. Dipping into savings or relying on credit cards for back-to-school shopping can leave you vulnerable to unforeseen costs, high debt and accruing interest.
You can approach the 2016-2017 school year with caution by looking for savings in the following five areas.