Ways to avoid your debt problems
Having a credit card can lead you to have too much credit card debt. Avoiding debt problems will take a bit of a change with the way you are used to spending. Always think before you make that purchase. Do you really need that new item? Impulse purchases add up over the weeks, months and year.
Easier said than done, but ultimately you need to spend less, and to help, you will need to create a budget worksheet and set aside some goals. To help you with starting off your budget worksheet, see https://davidsklar.com/wp-content/uploads/2014/04/Budget-Worksheet.pdf
Reducing your Debt
For ideas on reducing your debt and avoiding future debt problems, here are a few ideas to help you along.
Purchase items on sale – if you keep track of the sales on the various stores you shop regularly, this is a good way to buy the items you normally would that are now on sale. Researching the various prices of your most visited stores online, can help you plan your weekly grocery and help you get the most out of your money.
Avoid Credit Cards – With the credit card(s) you do have, use them wisely and only in emergency. Avoid building up unnecessary extra debt via your credit card. Avoid signing up for any extra credit cards, and the one(s) that you do have, only use them in emergency.
Try switching over to a cash only method. Only spending what you have budgeted from your cash on hand will help with cutting out those unnecessary items in the want list. If you are to use your credit card, charge only what you can afford, and pay off the amount that month so you will avoid any interest. Take note of your credit cards grace period, and pay the balance within this timeframe. There’s no point in building up points via your Credit Card if you are paying high interest on an outstanding balance.
Pay Off Credit Cards – Working to pay of the credit cards is essential. Just paying the base minimum amount each month will not go very far in eliminating your debt. Devising a plan to pay off your Credit Cards so they will be fully paid off should be on your to-do list. Most importantly, do not miss any Credit Card Payments. You can see about creating automatic payments from your bank checking account to your credit card for a certain amount each month so there are no missed payments.
Avoid using Cash Advances – Avoid the urge to use your credit card for any cash advances. Using your credit card in this manor can lead you to credit card debt. A cash advance with most credit cards is a loan against your line of credit, and with cash advances, it does incur a fee, and if the that amount is not paid off within the grace period, interest will start building.
Avoid Fast Food/Restaurants – One of the easiest ways your monthly expenses can rise on a weekly/monthly basis is eating out at your favourite restaurant. If you visit fast food places a few times a week, and/or take your family to a restaurant on a regular basis. Start calculating how much this is actually costing you on a monthly basis.
Savings and Emergency Funds – Setting up a savings and an Emergency funds account should be started if you do not already have one. If you have a family, home, pet or a car, it is easy to guess that some point down the road, you will need some extra money outside of your regular monthly allotted bills to help cover that unexpected bill.
For more articles from David Sklar and Associates see out Budget Basics Series, and download our Budget Worksheet.
