Standard disclosure: we may earn money from the companies mentioned in this post. Visit my disclosure page for more info
These are some of the key problems that will get you into debt and keep you there. You have to make sure you follow some of the suggestions on here to keep yourself out of debt. You need to make financial decisions that are important for the greater good, and this list will help you achieve that.
Keeping up With the Joneses
You may be familiar with the expression ‘Keeping up With the Joneses.’ This is the act of comparing perceived social class and spending big in order to match those around you. So many people do this, and many of them don’t even realize they’re doing it. It is a subconscious thing for a lot of people. But, you have to be wary of the temptation to do this. Stop trying to keep up with the Joneses, and you will be much less at risk of falling into debt.
Too Many Credit Cards
Credit cards seem like they are a lifesaver and an important component in your life. But, they can also be a wolf in sheep’s clothing. Often you will find that credit cards are a curse rather than a blessing. They can make it seem like you aren’t really spending money when actually you are. Bear in mind that everything you spend you’re going to have to pay back eventually and then some. So, it’s important that we figure out a way to stop using credit cards, or, at the very least, cut down on how many we use.
Overspending on Your Entertainment Package
Everyone loves to be entertained, and it’s an important part of switching off from the rigors of work. So, you need to make sure you have plenty of options around to help keep you entertained. There are so many entertainment packages out there that you have plenty of choices to make. And it’s important to do as much as you can to make sure you don’t spend too much on these packages. Many of us are forking out for sports channels, movie channels, and countless other package deals. These can wind up being pretty expensive in the long run, so you need to make sure you stop the overspending.
Spending Money You Don’t Have
Spending money we don’t have. We’ve all been there. We’ve all done it. It’s the same as the ‘Keeping up With the Joneses’ mentality. Many of us are often buying things before we have the money to be able to buy them. And this is one of the biggest causes of modern debt that people often fall foul of. There are so many ways you can fall into this trap of spending money you don’t actually have. So it’s important to look at how you can curb these buying impulses. Being more disciplined, as well as focusing on what really matters is the best way to make sure you stop spending money you don’t have.
Not Clearing Immediate Debts
We all have debts that pop up now and again, and the idea is to deal with them as soon as possible. If you leave these debts, they just grow and fester, and that’s when we start to get even more problems. So, if you have any debts to clear you need to do so as soon as they appear. Debt relief loans are an excellent way of dealing with the issues related to debt consolidation. If you can clear these small debts immediately, they are much less likely to spiral out of control and become bigger problems. So, you need to keep a handle on this and make sure you clear your debts as soon as you can. Lenders can write off debts as charge offs. It’s important to be aware of what a charge off means on your credit report.
Let’s all put our hands up and admit that we’re guilty of not budgeting. We don’t like to keep things organized in that respect because it’s a pain. It’s hard work for us to do, so we would rather just not bother. We like to spend vicariously, and we think we can keep a mental note of what we’ve spent and when. But, the fact of the matter is that not budgeting never works out well. At best it leads us to overspend more than we can afford to, and at worst it gets us into severe financial difficulties. Start setting a budget up for yourself so you can track your spending.
Lack of Savings
We need to make sure that we always try to save money as well. A lack of savings will no doubt send you careening toward the pit of debt at a very fast rate. So, think about how much you can do to start saving more money on a regular basis. You will need to be disciplined about it, but it’s definitely possible to achieve. Not having any savings is never a good idea because it gives you no safety net to fall back on. If you start getting into problems with debt, you will struggle to climb out due to a lack of savings. So, make sure you do as much as you can to start generating some savings and giving yourself a financial safety net.
It’s so, so easy to waste money these days, and you are probably doing it without even realizing. So many things these days are geared toward getting us to spend more and more money. It’s so much easier to amass credit cards, buy things online, and purchase using our cell phones. Other things such as unclaimed tax refunds and unused gym memberships, for instance, waste money. You have to make sure that you that you stop wasting money as much as you can. Start canceling the memberships you aren’t using, get rid of your cards, and be more disciplined.
These are all problems that we can get into that force us into debt, and keep us there. Tread lightly through this financial minefield, because there are dangers all around you. If you can get to a position where you understand and appreciate all the things that can cause debt, then it’s much easier to avoid. And we haven’t even covered some of the more obvious ones! Just make sure you are doing what you can to avoid sinking into debt as much as you can.