Who wants to end debts thinks high – I want! Sometimes it is a lack of planning that makes us sabotage our own efforts, while at other times bad habits lead us to unnecessary spending. In any case, it is not always easy to change the routine. Especially when you do not recognize what is causing the problem.
If you are doing your projects but in practice, your financial gains are not going as planned, it is possible that the way you handle the money is not right. And I go further, maybe you are the source of your money problems yourself. But be calm, this is more common than it seems.
There are dozens of things that people do to get out of the vicious circle of debt. To tell you the truth, there are people who do not live without contracting a debt and preferably in installments. As you read the article you can see that we highlight the ways in which we sabotage ourselves and our finances every day by creating more chances of not ending debt:
# 1 – Trying to compare yourself to neighbors and friends
Having friends with a good financial condition is often synonymous with alert because this can become a big problem to control your finances. If you try to accompany them on your expenses when your income does not allow you such luxuries, you will get into debt and fall into an endless circle that can cause a lot of stress, frustration and ultimately regret and financial bankruptcy.
When it comes to money, or you have, or do not have, try not to compare yourself to others or buy what they buy. Do the best you can according to what your budget allows, you may not live with many luxuries but will certainly live quieter and better.
And, let’s be honest: there is a good chance your friends will not be able to pay for their lifestyle and they will be struggling to get out of debt just like you. So get out of this dispute for no purpose at all.
# 2 – Using Debt as an Extension of Your Income
While many people think of debt as a very negative thing, it is possible to use it responsibly. Most of us need to borrow money to buy a home or a reliable car, otherwise these purchases become almost impossible.
But debt becomes a problem when you use it without thinking. If you use credit cards to buy things you do not need and can not afford, you may end up throwing hundreds – or even thousands – of real interest payments, down the drain, every year.
Instead of using debt as an extension of your income, use it in moderation – and when you really need it. By avoiding useless credit card debt and the bills that come with it, you can save and profit a lot from this by keeping more money in your bank account.
# 3 – Buying without responsibility
Prices can vary too much from one thing to another, from monthly subscriptions for products and services, insurance, clothing, to groceries and cars. If you are not in the habit of researching the best price when making your purchases, I have bad news to give you: you will hardly have money left over and you will always be in debt.
Compare prices to end debts
While some expensive purchases require weeks of research, day-to-day shopping should not be neglected, strive to do good business, even on little things. Luckily today technology is in our favor, so you can compare prices for most consumer goods online, and very easily. So there are no more excuses for you to stay in the red. It is possible to start changing your habits.
Whatever purchases you make, make sure you compare prices with at least three competing companies. That way, you will not end up paying more than you should without even knowing.
# 4 – Negotiate new car every year
As of the first quarter of this year, surveys pointed out that the average loan repayment for the new car purchase was R $ 506.00 per month and 68 months duration. With such statistics hovering over our heads, it is no wonder that many of us are struggling with debt and living to work.
If you are thinking of trading your car, pick up another newer one… Stop! Calm down then. It may not be the right time for this. Consider keeping your car for a few more years, worry about taking it off, enjoying it for a while without debt.. the feeling is great. Once you no longer have the monthly financing commitment, then you can start thinking about buying a newer car. It may sound silly but I assure you it is the best option.
Just think about how much money you could save if you were not paying R $ 300 to R $ 600 a month more on this whole joke. It works great to put the numbers on the tip of the pencil because it makes us think and helps us make wiser decisions.
# 5 – Paying Minimum Credit Card Balance
Raising credit card debt with today’s high interest rates is already pretty bad. Now falling into the trap of paying the Minimum is an absolute disaster.
A family with a balance of $ 10,000 on a card with an 18% margin and paying only $ 200 a month (the minimum) would take more than seven and a half years to pay for everything. Worse, they would pay $ 8,622 in interest on the lawsuit.
How to end debts!?
If you are pushing your debts with your belly and you have fallen into the trap of minimum payments, I must tell you that you are only postponing the disaster. Face your debts head on, it may be difficult at first but the sooner you do, the faster you can get out of them.