Why Most families are financially unstable.

The monthly plan for​ most working class families run goes like this:
Work from 9 to 5 – Use Credit Card to Buy and pay for goods and services within the month – Earn and pay Credit Card Debts with accrued huge Interest – No Savings or Investment – Start working again.

This habit is one of the major factors which is killing most families and making them go broke or become financially unstable. Looking at the simple illustration above there is a huge​ missing factor that determines the financial success of families and individuals; that factor is SAVINGS AND REINVESTMENT.

Here are the reasons why most families end up being financially unstable.

1. LACK OF SAVING OR INVESTMENT STRATEGY: Saving is one of the major habits that has lost its ground in most families today, which is why most families never seem to have enough; even with increasing pay rate. Also investment has been forgotten. Reason being that people think investment is only for the high class or high ranking people in the society, but this is where we are all wrong and I would prove it.
   Investment is not for only the high ranking people in the society, infact investment is for everybody including a five year old kid and even an unborn child(because you are responsible for his/her upbringing, so you start planning for the child’s future even before being born). Planning the Child’s life at this very young age would be of great reward to the Child’s parent and the Child personally. You might have made the mistake of not investing early in life, lets say you didn’t take your 401(k) plan for retirement serious or never wanted to enrol in it (which would have been very dangerous if you didn’t). where the whole problem about investment lies is in the way by which middle class and the low class individuals think, the thinking capability or capacity of the high class individuals personalize the whole idea of saving and investing and its now potraying an image that investment is just for the rich.
   One of the secrets that rich people do not tell the middle or the lower class people is that they don’t work for money instead money works for them.
   The First Advice would be to focus greatly on your retirement plan because without a retirement plan today, probably you are heading to living a poor aged life in one of the slums located around you and I bet that you don’t want that to happen to you, because I can’t neither would you imagine yourself driving a luxury car while working, living in a big apartment, only to retire from work and start to live like a pauper that never went to school to learn or someone that never got a place to work.
   Now lets say you invested about $2,000 yearly in shares worth around $1.5 per share unit, you would have about 1,400 share units. If you get retrenched from work in like 5 years time while still keeping those share units you bought years ago, you saved it long ago and it was looking like you were going to waste $2,000, but here you are the $2,000 that was wasted years ago is the one saving your future. My the time you go to the stockbroker to know about your current portfolio, lets assume that the Company you bought shares from has grown, the company’s share too would also rise accordingly. Lets assume a share unit is now worth $3.9(though it is very difficult to get that amount of increase in five years but it is possible in the long run) now you are going to sell your 1,400 share units at the rate of $3.9 per one that is now going to make the total sales money to amount to $5,460, that’s a profit of 3,460 in 5 years doing nothing. Imagine if you had bought up to $6000 that would be triple profit.

2. BUYING WHAT YOU WANT AND NOT WHAT YOU NEED: this singular process has incurred a large amount of debt of many families. Going shopping without a budget or shopping list is the major cause of this another factor can be being extravagant. You earn $4,000 monthly, you take your whole money with you for shopping and then at the shopping mall you get to see eye catchy things that are difficult for you to get your eyes off. You get your cash out and buy the product (without considering the fact that you don’t need it). Lets say you do this continuously on three consecutive shoppings, based on average family expenses you would have finished your salary, before going halfway into the month and you would be forced to start depending on your Credit Card to finance your purchases already placing the debt payment on your next paycheck.

3. WORKING FOR MONEY AND NOT MONEY WORKING FOR YOU: this all goes back to number one, instead of investing your money wisely(money working for you) you go to work every day​ hoping the receive a tiny pay check (working for money) at the end of the month.

4. UNACCOUNTABILITY​: not keeping records of all your daily and monthly expenses.
   The earlier you learn how to start managing your finances and stop depending on your Credit Card, the earlier you would become financially stable