Falling in debt is so easy. Debt creeps on you slowly and you aren’t even aware of it until you’re neck deep in it. On the contrary, crawling out of a debt trap is a task of mammoth proportions. It requires extreme financial planning and patience, sound credit counseling before you can be rid of it. Even after years, it still hangs over you like an ominous cloud.
The Best Plan
Stay Away from Debt Traps. Period. Here, you can find the list of top bad habits that pull you into debt traps. Stop these now!
#1: Swiping Credit Cards for all your Purchases
When you shop using your credit card, you’re actually spending money that you don’t have. Follow the age-old rule of Earn before you Spend and Spend only what you Earn.
Try to make use of debit cards, digital wallets or liquid cash for your purchases. All this reduces your debts.
#2: Not Putting a Portion of your Earnings as Savings
Just because the adage in the previous point stated that you have to spend from what you earn, doesn’t mean that you should spend all of it. It’s critical to save a portion of your earnings every month. Make it a habit and follow it religiously all through your earning years.
#3: Not Saving Enough before Availing a Loan
If you have a plan of getting a home loan or car loan in the future, then you must start saving for it, right from today. This will help you put up a significant amount as down payment, thereby reducing your EMI burden.
#4: Not being Aware of your Liabilities
Always ensure that you are aware of your debts. This discourages you from applying for other loans that you can’t afford. Also, keep track of the amount you owe to each lender and the tenure of your loans. This gives you a clear picture of your liabilities at any time. A non-profit credit counseling agency can help you analyze your liabilities and guide you on how to proceed.
#5: Owning one too many Credit Cards
Some people believe that the more the credit cards they have, the higher is their financial power. Nothing could be farther from the truth. Try to stick with just one or two credit cards and use them with utmost discretion.
#6: Delayed Payment of Bills
Make it a habit of paying all your credit card and other utility bills well ahead of time. This not only prevents your outstanding balance from accumulating but also improves your credit rating.
#7: Failing to Budget your Personal Finances
If you don’t have a proper budget in place, then you’re likely to spend beyond your means. A properly planned budget gives you a clear picture of all your expenses and helps you make the appropriate cuts as and when needed. You can seek the help of a credit counseling agency to help you plan your monthly budget.
Wrapping it up
Falling in debt is too easy. All it takes is a few extravagant purchases and poor decisions. Avoid falling into a debt trap by staying away from the habits mentioned above. If at all you fall into the clutches of debts, approach a reputed debt management credit counseling service to help you out. You can also benefit from credit counseling services offered by www.antworksmoney.com.
Stay debt free and enjoy true financial independence!