Professor Sahar Bahmani Featured in WalletHub
The following is a WalletHub interview with Associate Professor of Economics and Director of the Center for Economic Education (CEE) Dr. Sahar Bahmani. Link to Wallethub article here.
More than 6 in 10 people say they would go into credit card debt for frivolous purchases. Why do you think that is, and what advice do you have for those people?
My advice to people is to make sure they are not making frivolous purchases and than they are careful in differentiating between necessary spending vs. discretionary spending. They need to differentiate, when shopping and ask themselves is this a need or a want. Do you really need that sweater in multiple colors or are you being tricked into thinking that you do because it's buy one get one half off? Be mindful, be conscious and aware of what you are buying.
What does it say about the political and financial environment that 9 in 10 survey respondents say their personal finances are currently run better than the federal government?
It says a lot about the political and financial environment that 9 in 10 survey respondents believe that their personal finances are currently run better than the federal government. We see the federal government running budget deficits where they are spending far more than they are collecting in tax revenues.
More than one-third of people (36%) say they would do anything to get out of credit card debt. How dangerous is that mindset? Do you have any tips for people struggling with credit card debt?
It is a very dangerous mindset that 36% say they would do anything to get out of credit card debt. For those who are struggling with credit card debt, you have to be very mindful of the fact that you should and need to be saving regularly. My tip is to follow the 50/30/20 rule of thumb which is that you should be saving at least 20% of your income, while 50% (maximum) should be going to necessities and 30% goes to discretionary items. Discretionary items are not essential items such as dining out and entertainment expenses.
How worried should the 91% of people who anticipate they are at least one year from credit card debt freedom be about an economic recession?
The 91% of people who anticipate that they are just one year from credit card debt freedom should be careful and mindful of making sure to save plenty each month, this means atleast 20% at the very minimum.