Do You Have A Bad Spending Habit?

coolmoney By coolmoney, 15th Aug 2012 | Follow this author | RSS Feed | Short URL http://nut.bz/1zdd1mtk/
Posted in Wikinut>Guides>Money Saving Tips

While every effort is made to stay out of debt,you might want to check your spending habit and change certain of the habits that lead you into debt.

How Is Your Spending Habit?


Your spending habit is leading you into a lot of debt and you think that while this is happening , you have everything under control. One thing is true,you do have control of the money you earn and no one is telling or is going to tell you how to spend it.But something about the way you are spending it is not right and now is the time to give it
some serious thought and attention before it gets out of hand.

Debt isn't something that just happens coincidentally or accidentally.We need money to meet the basic necessities of life,like food,shelter and home. We also need it to buy new clothings,get a car that will take us to work and also to keep aside some of it for future needs.

But as we go about our daily lives our needs and wants simply increase and go beyond what is necessary and convenient for us. Much of what we don't need is out there,There are also things that we need but can't afford. And while we can't afford those things,our only hope of ever getting them is by taking out a loan or borrowing from parents and relatives. While parents and relatives can be tolerant,banks might not be tolerant on late or delayed payments .

Certain spending habits can lead to debt whether imposed upon us or not,and recognizing these habits now could save a lot of money and stress later. If you want to stop creating more debt and pay off the debt you have, you must eliminate these bad habits. So do you spending more money than you make?

It might be impossible to spend more than you earn but spending $1,200 or more each month on a paycheck of let's say $1,000 is very easy. Spending more than you make is easier than you think. So easy, you might be doing it without necessarily realizing it.

Do you have some savings apart? Well while you earned that money,dipping into that hard earned cash that you saved,borrowing from others, and using credit are some of the primary ways of spending more money than you bring in. If you can get away with doing this for a few weeks or months,soon or later, you will soon realize that your spending habit is catching up with you. Before you know it, your savings is depleted, your credit cards are maxed out and you can't borrow any more money.

If you are really on a spending spree then it's time to cut back on your spending and start saving for the future.As much as you possibly can, keep your spending within your monthly income so that you are living within your means and not creating debt. Reduce your spending below your income and use the extra to pay down your debt.

Spending more money than you make is enabled by spending money you don't have or money you are yet to earn. You spend money you don't have by using credit cards and taking out loans. When you use these instruments to pay bills and make purchases, you're creating debt. If you can't repay the debt each month, it will continue to grow.You can resolve this bad habit the same way you stop spending more money than you make - by reducing your expenses and relying only on your income to pay for your wants and needs.

Start using cash to make everyday purchases like groceries, gas, clothes, and entertainment. The appeal of credit cards is the ability to pay later for items that you buy now. The caveat is that you're less likely to pay your credit card bill for items that you've already consumed, which most "ordinary" purchases are. Using credit instead of cash is a bad habit, especially when you don't pay your credit card bills in full each month.

Some credit cards have reward programs that let you earn cash, miles, or points by charging more on your credit card. If you choose to maximize your reward earnings by charging more, only charge what you would have purchased with cash and pay off the purchase immediately.

Another bad habit that leads to debt is choosing credit over cash when you actually have the cash. You might want to get the goods (or services) without having to pay for them, but the convenience of holding on to the money in your wallet comes at a cost. Chances are, if you don't want to pay for it today, you're not going to want to pay for it tomorrow.

To change this bad habit, you have to be willing to pay for what you want with the money you've earned. Realize that while you can postpone payment by using credit, you'll end up paying more than if you'd just spent your own cash.


When you use credit cards to pay off other cards and loans to pay off other loans you're not paying off anything. You're just shuffling your debt around and incurring more debt each time you do so. Balance transfers have transaction fees and most loans have some kind of down payment or origination fee. So when you use debt to pay off debt, you end up worse off than when you began.

Using debt to "pay off" debt might be beneficial if you can transfer a balance from a high interest rate credit card to one with a lower limit. However, you have to be careful that the balance transfer fee doesn't negate the interest savings and that your post-promotional interest rate isn't worse than your previous rate. Transferring a balance once or twice to take advantage of a great rate is different from continually transferring balances to dodge credit card payments.

Tags

Credit, Credit Cards, Credit Debt Help, Debt, Debt Advice, Debt Consolidation, Debt Crisis, Debt Problems, Moneyedit Card Payments

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author avatar coolmoney
I am a great guy to work with.I take my work seriously and to the letter and can adjust and work in any enviroment and with any person.
I love writing about relationships,technology,computers,social.

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Comments

author avatar A K Rao
19th Aug 2012 (#)

I have got a bad habit of spending but then I never use any credit cards or get into debts! I am dead against borrowing and having debts! Nice article dear cool mony! Thanks !

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author avatar coolmoney
19th Aug 2012 (#)

Thanks Rao

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author avatar Jhon Marshall
16th Nov 2013 (#)

I spend to much than I earn

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author avatar coolmoney
17th Nov 2013 (#)

This could be a problem Jhon if you do not control your spending. I hope you take measures to reduce your spending and save more. Thanks for your comment.

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