Having poor spending habits is one of the fastest ways you can end up in debt and can jeopardize your ability to build wealth. So what are some examples of good and bad spending habits?
The Good
While good spending habits can be hard to cultivate, a lot of them can come down to simple adjustments made deliberately. The absolute best habit that the financially stable have is keeping track of their spending. By carefully monitoring their purchases, they can fine-tune their behaviors and stay on top of any spending that’s getting out of hand. They also plan ahead. Buying in bulk, building up an emergency fund so they don’t have to take out a loan when times get tough, and taking advantage of any big sales are some key tactics good spenders use to stay on top.
The Bad
Bad spending habits are the polar opposite, for most people they come naturally. Buying a snack from an overpriced vending machine, eating out instead of cooking yourself, and buying clothes at full price instead of waiting for a sale. But it isn’t just limited to impulse purchases. They can also come in the form of utilities. Leaving lights on when you aren’t in the room, overusing your air conditioning, and not performing regular maintenance on your car can all lead to excess expenses at the end of the day. While these are certain habits you should try to break, they’re nowhere near as corrosive as others.
The Ugly
Spending your own hard-earned money in a foolhardy way is one thing, spending money you don’t have is another. It used to be a lot easier to really see the money you were spending. You’d sit there at the register, counting out each individual dollar, and watch it fly out of your wallet. Then came credit cards. Now you can spend money you don’t actually have with just the swipe of a card. And this can lead to an absolutely detrimental set of habits that can destroy your financial health and wellbeing. It can also be detrimental to your mental state as well. If you’re in debt, then you’ve likely had plenty of calls from debt collectors. And you know just how powerless they can make you feel. Luckily, you can check out Freedom Debt Relief’s advice on stopping debt collector calls to get some information on your options.
What Are My Options If I’m Already in Debt?
If you’re already in debt, you may feel hopeless, but there are actually a lot of options for you to start building your way back up to financial independence. For those with credit card debt, one potential option is known as debt consolidation. This is a process that involves taking your high-interest debts, rolling them all into one, and ending up with a larger loan with a lower interest rate. This can help you get out of the vicious cycle of extreme credit card debt. If you have more traditional debts, debt settlement may be better for you.
What is Debt Settlement?
Debt settlement is another type of debt relief offered to struggling consumers. It’s a fairly lengthy process, as it can take several years, but for larger debts, it can potentially end up saving you money in the long run. Debt settlement involves the debtor approaching a debt relief company, which will then take a look at the pertinent financial information and figure out if settlement is the right option for you. If it is, you’ll then be instructed to stop paying your debts, and instead, put that money towards a secure account. Once that account has grown, they’ll use the money you’ve collected in it as leverage in negotiations with your creditors. Creditors will often be willing to settle for less just to close the account. And next time, you can heed these examples of good and bad spending habits, and avoid the situation entirely.
