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Bryan P. Keenan

Difficulty saving money could be a sign of future debt problems

The holiday season often leads to financial difficulty, particularly for families that already have a relatively tight budget. Many people feel obligated to travel to visit family members in November for Thanksgiving and in December for Christmas. It isn't hard to imagine how all of that travel could destroy someone's budget.

Even if you don't have to travel far to visit loved ones, you will likely still need to purchase gifts, which can often mean assuming credit card debt for several months. As if that weren't difficult enough, if you host the holiday gathering, you will also have to provide refreshments and lodging for your family out of town.

Some people may feel like they are ahead of the financial curve if they can cover their holiday costs without racking up substantial credit card debt. However, just avoiding new debt doesn't mean you aren't still in a financially precarious position. If covering your holiday expenses means you don't have the ability to save any money, you could be closer to financial hardship than you want to believe you are.

Without savings, you are one bad day away from debt

If your household budget currently allows you to cover all of your costs, you may feel comfortable about your ability to keep paying your bills. Still, if you don't have an emergency reserve, you will likely find yourself struggling financially in the future when something difficult comes up.

Anything from the closure of the company where you work to a car accident could leave you with reduced income and increased expenses. Adequate savings to cover several months of living expenses are the only way to insulate yourself from the hardship that results from unexpected financial strain. However, very few American households actually have the savings to offset a sudden emergency.

Know when you need help to regain control of your finances

When you have so many monthly obligations that you can't save money for a rainy day or your retirement, spending just a little bit more one month could mean carrying a balance on your credit cards. Over time, the balance could build up, and if something significant happens, you may not be able to bounce back quickly.

Instead of struggling to make ends meet for months while watching those balances slowly increase, it might be better to take charge of your life sooner rather than later by filing for bankruptcy when you can no longer meet all of your monthly financial obligations.

Although bankruptcy affects your credit score and your ability to get new lines of credit, it can also reduce the amount of money you have to spend each month, which can make it easier for you to save and put you on better footing for your future, as well as your retirement.

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Bryan P. Keenan & Associates, P.C.

993 Greentree Road
Suite 101
Pittsburgh, PA 15220

Phone: 412-923-4941
Fax: 412-444-0158
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