How to Be a Smarter Financial Consumer

Finances are very complex and it’s important to understand them as a consumer. Lack of understanding often leads to poor decisions that can wind you up in financial trouble. It’s important to learn how to be a smart financial consumer to avoid this.

Stay Educated

If you want to be a smart financial consumer, then you first need to educate yourself on finances. Part of this is being financially literate. This means you understand finances including how to save, budget, invest, etc. Most people in America are not financially literate and this leads to a lot of individuals with high debt and little savings. To become financially literate, you need to gather as much information as possible. Reading books, listening to podcasts, reviewing government sights, and more can help you be more aware of important financial terms and concepts. Similarly, you should follow news and trends in finance. Doing so will make sure you are up to date.

Source: https://investedwallet.com/become-financially-literate/  

Beware of Predatory Practices

Another part of being a smart financial customer is knowing what you should avoid. There are some financial products or services that try to take advantage of you. Most commonly you will see predatory lenders. These lenders will use fraudulent practices to deceive you and take your money. You need to know what to look out for to avoid these lenders and get a fair loan. Make sure you research several loan options instead of just going with the first one. There are also some signs of predatory loans and their lenders. Predatory loans have far higher fees and rates than standard loans. Be aware of loans offered via mail, phone, or sold door to door. Most reputable lenders won’t use these tactics.

Source: https://www.podium.com/article/predatory-lending/ 

Read the Fine Print

Before you sign any contracts, you should always read the fine print. This is where the issuer will hide information that they legally have to tell you but might not want to call attention to. This can often include extra fees and costs that you might not be prepared to pay. As you peruse a contract, you’re likely focused on your own gain, but the fine print can point out exclusions in your contract that you should be aware of. Similarly, you might even be signing away some rights. Always read the fine print to be safe.

Source: https://safer-america.com/read-fine-print/  

Being a smart financial consumer can be highly beneficial. You can save yourself some money and avoid real trouble. Make sure you take time to educate yourself about finances and always use best practices.

Read this next: How to Handle Bills You’re Unable to Pay

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