Bad Habits

If you’re always wondering why you’re in debt, the first place you need to look into is your spending habits. You might have gotten into debt because of conditions beyond your control such as sickness, losing your job or getting an accident. But often, your daily spending habits affect your ability to stay out of debt, or stay in it. Look at these habits and see if these are what trapping you in debt.

You Spend More than You Earn

If you earn only $1,000, there’s no sense spending $1,200. You know at first glance that you’ll have a deficit and if you persist, you know you have to come up with the lacking $200 through other means. You might consider borrowing from your sister, charging your credit card or take out loans.

You might be able to get away with this habit in the first month or two, but if you keep it up, your debts will soon catch up to you. Take control of your spending by keeping a budget, cutting back on some expenses and tracking your spending.

Spending Money You Don’t Currently Have

If you don’t have funds in your credit account or cash at hand, you must admit that you currently don’t have the money to pay for your purchases. The credit card may be a handy solution, but it also creates an illusion of money: you can just swipe and pay the balance later on. Still, you’re only borrowing from your credit line, and it doesn’t mean that money is immediately there. You’ll still have to pay for it later on.

Some people resort to taking loans for some of their expenses. For instance, you can get personal loans for people with bad credit to pay for urgent home renovation. This still qualifies to habit #2. But you also have to look at the overall picture. Are you taking personal loans for people with bad credit to fix your home which has been damaged by the storm, or you merely upgrading your appliances and furniture? There’s a world of difference in addressing a basic need and satisfying a mere want.

Charging Your Credit Card for Ordinary Purchases

Your credit card may eliminate the need to carry cash, but it’s also not healthy to charge your card even with the most mundane purchases — a carton of milk, cereals, coffee, diapers etc. It’s easy to go over board and spend more because you don’t really see the damage made by your charges.

Consider using cash for basic expenses. Just the feel of money changing hands is enough to let you re-think your purchases. It also helps you stick to your budget and even the potential interest in your credit card if you pay up late.

Indeed, you can go into debt if you don’t watch out how you spend. Start catching the leaks in your spending habits and patch them up with being practical and vigilant. Being in debt can be stressful, so make sure to spend wisely and accordingly.