Category: <span>Debt</span>

If you are in debt, you could be digging yourself in deeper with some bad habits. Make sure you avoid these no-nos if you’re in debt:

1) Paying small amounts or minimum payments on credit cards and personal loans. Paying just the minimum just extends the misery since it ensures that it will take you many months or years to get debt free. Pay more than the minimum to dig out faster and to pay less interest.

2) Taking out more loans, especially from family and friends. New loans are a problem, as they keep you perpetually in debt. Work with a budget to ensure that you pay for all necessities so that you don’t have to rely on payday cash advances or friends.

3) Looking for credit counseling and paying money for that. Many people who are in debt immediately seek out credit counseling and pay a hefty fee for some pretty obvious advice. Unless you are really drowning in personal loans, you can usually help yourself by budgeting and paying off your debts over time.

4) Continuing your usual spending habits. If you are in debt, that is a clear sign that you need to rein in what you spend. Cut back to the basics and find cheaper alternatives for your everyday expenses.

5) Taking out high interest loans to consolidate your debt. Consolidation loans can be handy, but bad credit loans or high interest loans for consolidation can still leave you paying a lot in interest.

6) Paying all your money towards loans. Even if you are eager to pay off your loans, you still need to set aside money for your emergency fund and retirement savings.

7) Putting off bankruptcy too long or taking this out too soon. Bankruptcy can be a useful tool, but it is meant as a last resort. Being too eager to file bankruptcy can mean that you ruin your credit rating needlessly. Waiting too late can mean that you face more serious financial consequences.…

Debt Money

If you are in debt, there are some things you should cut out so that you can save more and channel more money towards personal loans, credit cards, signature loans and other debts:

Dining Out. When you dine out, you pay for the food, drink, wait service, food preparation labor, and tip. You also pay for a hefty mark-up, especially on drinks. Making food yourself is healthier and saves you a lot of money.

Entertainment expenses. Going to the movies, video rental store, gaming stores, amusement parks, concerts and other entertainment venues sets you back a lot. You can budget for some entertainment expenses, but a better solution is to find free or low-cost ways to have fun. Your local library and newspaper usually has long lists of free classes, talks, workshops, film screenings, concerts, and other events for you to enjoy.

Cars. Buying new cars costs a lot – and cars depreciate fast, so you start losing money on your new purchase as soon as you roll off the lot. Gas can also set you back, as can repair costs. If you need a car, look for a used car and carpool to save on gas costs. Otherwise, look for car alternatives. Walking, using public transport, or using a car share service are all viable ways to get around.

Phones. Having the latest cell phone as well as a full-service package quickly adds up. Take a look at your phone costs: you may be able to get rid of your ground line if you use your cell most of the time. Or, switch to a low-cost, no-frills cell package and only use your cell for emergencies.

Gym and country club memberships. Memberships can cost a lot and most members under-use facilities and services. If you don’t visit your gym or club often, get rid of the membership.

Recreational Shopping. Spending money when you don’t need to can mean an emotional high – and huge personal loan and credit card debts. Shop with a plan and only when you are clam, well-rested and fed.

Magazine Subscriptions. Most of us only read a small fraction of magazines and paying $20 a pop to flip through some pictures is expensive. If you love magazines, browse them at your public library.

TV packages. Getting every channel under the sun is usually not necessary. You don’t want to spend your life in front of the TV. Get the fewest channels you need to watch your favorite shows. Keep in mind, too, that you might be able to watch your favorite shows online now, too, so you might not need many or most of those fancy channels.…

Budget Debt