Tips for Avoiding Bankruptcy
We live in a world of temptation, there’s no doubt about it. Why do you think credit cards, personal loans and mortgages exist? While on one side, they are quite beneficial, the companies that give these benefits to you are also charging you fees on top of every dollar they lend. They do allow us to finance houses, buy cars and even purchase products we normally wouldn’t have the money for though, but at what long-term cost?
Fees and interest rates aside, these benefits can also get you into a lot of trouble financially if you’re not careful. While some people have the ability to repay their debts without a problem, others can end up buried within a matter of years, sometimes even months if they take out the wrong kind of loans.
No one ever wants to find themselves in this sort of situation, but it happens. It’s a reality, especially with the economy the way it is right now. If you feel like you’re headed down this path, we’re here to help you do your best to stay clear of financial ruin. The following tips should help you improve your chances of adding on any unnecessary debt.
When possible, pay with cash. Most consumers these days have a bad habit of paying with their debit or credit card. While this is extremely convenient, it’s actually too convenient. It “hurts” much more to actually count out the cash, and realize just how much you’re paying for certain foods and activities. If you tend to overspend, this will amplify the emotional effects, helping you cut down on it in the future.
This one almost goes without saying, but making a budget and staying within your limits is absolutely the number one activity you should be doing to cut down on your debt. Without it your finances can get out of control very quickly, especially if you don’t take notice of how much you’re spending. By making a budget it will give you the peace of mind of knowing exactly how much money you can spend, and how much you have coming in.
Cut down on impulse buys. What do we mean? This includes the latest gadgets, stylish new clothing, or anything that instills a feeling of, “I got to have it now!” If you can break that cycle, rationalize the purchase and realize that you really don’t need that item as much as you think you do, this can go a long way to helping you stay within your budget.
Stay away from buying now and paying later. These types of offers are similar to credit cards, but usually don’t charge any interest rates. However, they’re still delaying the inevitable. If you don’t have the money now, simply don’t buy the product. Wait till you have the money, then go back and pick it up. If you waited long enough, you may even feel like you don’t need it anymore. Your rational side will say, “I’ve waited this long, do I actually need to buy it anymore?” This can be a very powerful tool.
Shopping around can help save you some money in the long run as well. Try your hardest not to give in to the first offer that comes your way. Usually there’s another way to buy that product out there. Take college textbooks, for example. If you’ve gone through your school’s bookstore before, you know you can end up paying a couple hundred dollars for books you’ll be using for a few months. If you took the time to explore your options, you’d find out you can rent your books for almost three times less on a website called Chegg.com. Talk about a deal! You could have simply saved that extra money you dished out unknowingly.
When you go out shopping, don’t bring along your debit or credit card, only bring enough cash for whatever you’re going to buy. This will make you stay within your budget, since you have no other choice but to shop smart.
Keep an eye on your bank statements every month. While this tip ties in with your budget, keeping an eye on your statements can be a big help. Once you realize how much you’re spending and set a budget, you’ll need to check in with yourself from time to time, to make sure you’re still adhering to what you originally laid out as a plan.
Finally, if you absolutely need to make a purchase with a credit card, work your hardest to always pay more than the minimum payment. This can feel tough sometimes, but if you don’t you’ll be paying it off, along with a bunch of fees, for at least twice as long as it should take. You should also consider transferring high balance to lower interest rate card offers. This will also help save you some big bucks in the long run.
Fees and interest rates aside, these benefits can also get you into a lot of trouble financially if you’re not careful. While some people have the ability to repay their debts without a problem, others can end up buried within a matter of years, sometimes even months if they take out the wrong kind of loans.
No one ever wants to find themselves in this sort of situation, but it happens. It’s a reality, especially with the economy the way it is right now. If you feel like you’re headed down this path, we’re here to help you do your best to stay clear of financial ruin. The following tips should help you improve your chances of adding on any unnecessary debt.
When possible, pay with cash. Most consumers these days have a bad habit of paying with their debit or credit card. While this is extremely convenient, it’s actually too convenient. It “hurts” much more to actually count out the cash, and realize just how much you’re paying for certain foods and activities. If you tend to overspend, this will amplify the emotional effects, helping you cut down on it in the future.
This one almost goes without saying, but making a budget and staying within your limits is absolutely the number one activity you should be doing to cut down on your debt. Without it your finances can get out of control very quickly, especially if you don’t take notice of how much you’re spending. By making a budget it will give you the peace of mind of knowing exactly how much money you can spend, and how much you have coming in.
Cut down on impulse buys. What do we mean? This includes the latest gadgets, stylish new clothing, or anything that instills a feeling of, “I got to have it now!” If you can break that cycle, rationalize the purchase and realize that you really don’t need that item as much as you think you do, this can go a long way to helping you stay within your budget.
Stay away from buying now and paying later. These types of offers are similar to credit cards, but usually don’t charge any interest rates. However, they’re still delaying the inevitable. If you don’t have the money now, simply don’t buy the product. Wait till you have the money, then go back and pick it up. If you waited long enough, you may even feel like you don’t need it anymore. Your rational side will say, “I’ve waited this long, do I actually need to buy it anymore?” This can be a very powerful tool.
Shopping around can help save you some money in the long run as well. Try your hardest not to give in to the first offer that comes your way. Usually there’s another way to buy that product out there. Take college textbooks, for example. If you’ve gone through your school’s bookstore before, you know you can end up paying a couple hundred dollars for books you’ll be using for a few months. If you took the time to explore your options, you’d find out you can rent your books for almost three times less on a website called Chegg.com. Talk about a deal! You could have simply saved that extra money you dished out unknowingly.
When you go out shopping, don’t bring along your debit or credit card, only bring enough cash for whatever you’re going to buy. This will make you stay within your budget, since you have no other choice but to shop smart.
Keep an eye on your bank statements every month. While this tip ties in with your budget, keeping an eye on your statements can be a big help. Once you realize how much you’re spending and set a budget, you’ll need to check in with yourself from time to time, to make sure you’re still adhering to what you originally laid out as a plan.
Finally, if you absolutely need to make a purchase with a credit card, work your hardest to always pay more than the minimum payment. This can feel tough sometimes, but if you don’t you’ll be paying it off, along with a bunch of fees, for at least twice as long as it should take. You should also consider transferring high balance to lower interest rate card offers. This will also help save you some big bucks in the long run.
