4 Habits That can Get You in Debt!
By Arthur B. —
Published February 27, 2018
Being in debt is a very stressful and soul-crushing experience. Everything in your life seem to revolve around the fact that you’re deep in debt. Needless to say, being in debt can be a real headache. Debt can significantly compromise your quality of life. Mostly because you’ll have to prioritize on making those monthly payments on time and everything else will have to take the backseat.
Being in debt doesn’t just happen out of the blue. Actions have consequences and debt is a big consequence of bad financial decisions. There are numerous spending habits that inevitably leads to debt. Start recognizing some of these habits right away so that you can save yourself a lot of money and stress in the future. Here are a few habits that can lead to a lot of debt over time. 1. Spending money impulsively
While the occasional impulsive buy is okay, constant overspending can have a dire effect on your bank account.
❖ Never put your unplanned, impulsive expenses on credit. This can inadvertently cause you to spiral into a deep and dark hole of debt over time.
❖ Never spend more money than you make. If your paycheck is $1200 per month, don’t spend more than $1000. Spending more money than you make is a common and surprisingly easy mistake that people make. Keep track of your expenses and never go overboard. You could be doing it without even realizing what you’re doing. When you dip into your savings, use your credit card excessively or borrow money from others, you can easily spend more money than you make.
❖ Never spend money you are yet to earn. This is also an easy mistake to make. The guarantee that you’ll be paid makes you a little impulsive. It gives you that final push that you needed to buy the shoes or cashmere sweater you’ve been eyeing for weeks. When you use methods such as credit cards, taking out loans like cash advances or payday loans, you’re creating debt. If you fail to repay the debt in full by the end of each month, it is guaranteed to grow and fester like an open wound. And before you know it, you’re dealing with a full on infection. 2. Eating out excessively
Although eating out and ordering dinner every day may seem pretty harmless at the time, it can have a big impact on your bank account. For the 1st time in years, people are spending more money eating out than they are spending on groceries. Eating out will only be a problem if you can’t afford to do it in the first place or if you place all your orders on your credit card. That tends to really add up over time and if you’re not careful, it has the potential of landing you in knee-deep debt. 3. Not following a budget
Planning your money is very important when it comes to managing debt. Without a basic plan, you won’t know when to stop spending. There’s no way you can know how much you’re actually spending and on what if you don’t keep any track of your expenses. Create a spending plan every month so you can plan your expenditures accordingly. Creating a budget is a foolproof way in which you can build your savings and decrease your debt. Track your expenses first. In order to keep a good financial plan, you’ll have to understand how much you’re making and how much you can afford to spend. 4. Not having an emergency fund
There will always be surprise expenses in life. Your car might get totaled or you might lose your job. You can never know what the future holds with absolute certainty. An emergency fund gives you a crutch to hold onto when things don’t go the way you planned. Always prepare for the unknown.
Bad financial habits can lead to a mountain of debt and financial ruin. Be careful the next time you take out your credit card. Think twice about whether you actually need the things you’re most likely to splurge on. Be prepared for the future.