When families aren’t prepared for the future or an emergency, they can get into debt very fast. There are many different ways families can get into debt without much effort at all. Many people look for the instant gratification that they may get from the situation but later on regret the decision they have made. It is important that we are prepared for what the future may bring us or start to get prepared right now. The earlier that you deal with your debts will help you tackle
them head on and create a more secure future for you and your family.
Credit Cards
Credit cards have been something that many families have turned to in a time of need or maybe just a want. Since most people rather just swipe a piece of plastic instead of count out money, they will have a chance to over spend. Some credit cards come with very high interest rates and annual fees that are outrageous. If you don’t pay off the balance on a monthly basis, then the charges can add up quickly and cost you more money down the road. If credit cards are used properly they can be a great way to get rewards and cash back.
Short Term Loans
When your family experiences an emergency and needs money to hold you over until the next payday, you may opt in for a short-term loan. Short-term loans are more commonly known as payday loans. These types of loans can come with very high interest rates and a debt trap. If the small print isn’t read carefully enough, you could be paying up to 400% interest rates and have many other charges apply.
Living Above Your Wage
There is a common saying, “Live your wage, not someone else’s.” Many people love to keep up with the Jones next door. They will go out and buy the expensive cars, fancy clothes and take the luxury vacations, when in reality their income can’t completely cover this. This can lead you and your family into debt very fast.
Compulsiveness Spending
When you go into a store and see something you just have to have that moment, you are filling a void. Most times these items that you had to have that minute are items that will be thrown in a closet for a drawer and never touched again and if they are used again, not for long. Compulsiveness spending is something that is dangerous. It can tap into other budgets and leave your family with out or jut in debt later on.
Lack Of A Budget
When many people think about the word, ‘budget’, they cringe. This is because they don’t want to come to reality of what they really have and what they can really afford. It is important that you make a budget your family’s income and stick to it. When you create a budget, make sure to have part of your income going toward other debts. Even if it is only a few dollars, each dollar will add up.
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One thing that my family has done to decrease our monthly spending it to start using mostly cash to pay for everything.
Sometimes it is difficult not to use plastic to pay, because it is so convenient, but we always spend less if we pay with cash.
There is something about see the balance on our account drain, when you withdraw funds that keeps us from overspending. I would definitely recommend it if you are trying to spend less each month.