Mend the way you Spend, Say Goodbye Debt Dead-End

Getting caught in the debt-trap is not an everyday affair for people. It cannot be a well-thought plan of life, but is actually a consequence of irresponsible spending behavior and unwise decisions. To save yourself from further financial-woes, stress and strain recognize your inappropriate spending patterns and correct it before it is too late.

1. Do you swipe your card for regular purchases?

Don’t make it a habit to swipe your credit card for daily purchases like grocery, clothes, entertainment or gas. Instead, use cash for such items. Save your credit for either high-priced purchases for which you are unable to shell out the entire amount at one time or for expenditure on luxuries. Human behavior is such that you are less likely to pay back your credit for goods that you have already used up and everyday consumables are devoured right away. Make cash-buying a routine.

1. Do you spend more than you earn?

Although, this sounds illogical, there are several people who have an income of $1000 but spend amount $1500. They make this almost impossible task possible by either borrowing from relatives or friends, dipping into their savings or simply by using credit-these are just some of the ways they do it. You may be able to seek refuge in the shelter of these temporary tactics for a few days, weeks and perhaps months, but you cannot evade the debt-trap for long. You shall see your finances slip away from your hands when you can no longer borrow, your savings are drained and your credit cards have reached their limit.

1. Do you use one debt to clear another debt? 

Keep away from debt-swapping. By utilizing the credit of one card to pay off another or by securing one loan to settle another is not a wise or sensible decision. In fact, by doing so, you would slip even deeper into the debt-ditch. There is a transaction fee on balance transfers and there is an origination fee or a down payment on most loans. Hence, you would be in a worse situation than you were in earlier.

1. Do you use credit even if you have sufficient cash? 

Flashing your credit card even though you have adequate cash to pay for goods or services might provide you temporary joy of not having to disburse cash; however it’s not a long-term solution. This delayed-payment for once would come as an increased cost later. Most consumers make it a regular practice to use credit as an alternative of cash, without realizing the repercussions. This practice further adds to your debt- burden.

1. Do you expend cash that you actually don’t have? 

If your expenditure is more in comparison to your earnings, then you are using more than you have. You can do so only if you borrow-either by taking a loan or by using plastic money. If you repay either of these in time, there isn’t much harm , however if you are unable to do so, you are inviting trouble in the form of debt.