When it comes to people struggling, it’s actually not because of their financial illiteracy. One of the big issues that people all around the world struggle with is simply low wages. When a person has a low paying job, it’s very difficult to set up a budget as some things such as rent, food and electric are necessary bills that everyone needs. This leads to people opening up credit cards which then leads to people putting themselves into major debt just to survive.
Key Takeaways:
- Those with low real wages may struggle with simple budgeting, let alone retirement planning.
- The “avalanche” method pays the minimum on all debts, while the “snowball” method tries to pay off the most expensive debt first.
- In addition to managing debt, it helps to claim benefits one is entitled to.
“Surveys supposedly highlighting our financial illiteracy test us on arcane matters such as estate and inheritance-tax planning or what is the maximum lifetime allowance for pensions contributions.”
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