The 5 Spending Steps to Debt
Looking to get into debt fast? Finding there isn’t quite enough pressure on your finances? Keen to get some more stress into your life? Probably not. Why then, do so many of us continue to make the same spending mistakes that are sure-fire ways to bring about a bad debt problem? Luckily, Debtsolver are on hand to flag up these top five steps towards bad debt. So, if you recognise your spending habits in there, you too could be headed for debt.
1. Do you spend more than you earn? This is the most straight forward route into debt and the one taken by most people. Although it might sound like an exercise in irresponsibility, this can be a relatively easy habit to fall into, particularly if your financial circumstances change. If your ability to work is limited, you are forced to cut down on the number of hours you work or are made redundant, your outgoings will not necessarily be able to immediately adapt to this change in circumstances.
2. Leading on from point 1, if you’ve been spending more than you earn, you’ve essentially been spending money that you don’t have. You are able to spend money you don’t have by using your credit cards, store cards and taking out loans. Falling into the habit of using these means to meet other credit repayments is a downward spiral to a severe debt problem. Even for those who are confident that a buy now, pay later approach is well within their means, a change of financial circumstances can soon land you in debt difficulty.
3. If you find that you’re getting into the habit of using credit to make your usual, day to day purchases, the interest applied can mean you’re paying over the odds for your goods. You should definitely try to stick to cash for these things. Obviously, using your credit cards is all about paying later for the things that you want now. However, it’s much harder to stay motivated and committed to a repayment plan when you’ve already consumed or used the ordinary, boring things that you’ve bought. It’s too easy to then just pay the minimum on your credit card, rather than pay it off each month. Then the purchases will definitely end up costing you more.
4. Similarly, if using your credit card still gives you the sense of getting something for nothing, you’re edging ever closer to a serious debt problem. What makes you think that you’ll all of a sudden want to pay for something more once it’s no longer so new and the shine’s gone off it? Using your credit card to make purchases when you actually have the cash is a mistake and if you want to avoid debt.
5. Taking on more credit to pay off your existing debt is the last in our list of steps towards a really serious debt problem. The first thing wrong with that concept is the idea that you’re actually paying anything off. All this achieves is shuffling debt around. Chances are that you’ll be picking up more debt as this goes on and your financial situation will be getting harder to solve. Free balance transfers can be a good idea for those that can afford to pay off the outstanding balance before any 0% period ends. It’s important to remember that the debt consolidation loan, although another form of credit, is not in the same category. It is debt solutions which helps a lot of people deal with their mounting debt problem and regain control of their finances.
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