The irresistible temptation of modern life characterized by impulse buying, indulgence in a shopping spree, maintaining multiple credit cards, spending more than earnings and other alluring charms inevitably lead to debts burden under which one can irrevocably get crushed.
Being alert on time by surveying the ominous signals can save money and undue stress later on.
The paycheck should be viewed as the basis for spending. If in a particular month you venture to cross the income level by mindless expenditure, remain assured you are in for trouble.
Realization of being careless with spending generally dawns in later but the apparent signals can be putting your hands in savings to meet needs, borrowing from the third party and getting addicted to credit.
Before you come to terms with the actual situation, you will find your credit cards getting maxed out and saved funds being depleted. Try to live within your means to stop creating debts.
Taking loans using credit cards in an unbridled fashion, and dipping into funds socked away are conspicuous indicators of overspending compared to what is being built financially through income.
Reasons for Debts
Debts are created whenever any of the instruments mentioned ahead are invoked to indulge oneself rather than closing off the monetary calls of bare exigencies of life. This bad habit should be resolved at the earliest by brutally cutting down expenses and taking recourse to the income at hand only to defray the necessities of life.
People falling prey to the wasteful habit of paying off trivial everyday purchases pertaining to groceries, gas, and other life’s necessities with credit cards instead of hard cash are liable to become easy victims of debt.
People are disinclined to clear off credit card dues for items that they have already consumed and stop settling dues at the end of each month for petty items. Credit card companies set up the trap to ensnare gullible people by offering alluring reward programs that incite unsuspecting lots to use more of the credit and ultimately make them sink in the mire.
Another spending habit that brings about debts is opting to use the credit option when you have sufficient cash in your hands. The convenience of stacking the money in your wallet can weigh heavily on your habit of paying off debts too, thus resulting in accumulation of dues until they assume gargantuan proportions.
Most people who don’t like to pay today are highly disinclined to pay tomorrow too and are never able to get into steps of bebt reduction that can help them reduce their debts.
The ultimate habit that can prove to be the final nail in the coffin is to use debts to clear off other debts. This implies borrowing from one credit card to settle the balance of other cards or seeking a loan to pay off earlier loans. One unknowingly gets caught up in the web of high-interest charges and finally has to file for bankruptcy.
This habit makes people shuffle their debts around and in the process incur more. One will end up worse off than earlier by getting tangled in transaction fees and down payments.