It’s easy to get into debt but getting out of debt can be a difficult thing to achieve.
If you don’t manage your debt it can become a burden on finances and it will take longer for you to pay off debt or you might never get out of debt for the rest of your life.
Here are 5 Reasons Why Certain People Will Never Get Out Of Debt
1. Lack Of Emergency Fund
When you don’t have an emergency fund you will find yourself relying on taking debts to cover any emergencies in your life.
These emergencies might include break-down of any insured home appliance such as washing machine, fridge, vacuum cleaner.
To avoid taking debt whenever an emergency occurs make sure you have saved some money after for emergencies.
You can start saving money even from as little as £50 a month, money saved will add up with time.
2. Taking Out A Big Debt
Taking out debt that is too big for you is one mistake that most people do.
Before taking out a debt make sure that you can manage to pay it back without financial problems.
A big debt will leave you out of pocket every month.
3. Trying To Keep Up With The Jones
These days we are living in a world where people want to appear or look better than others.
With the help of social media such as Facebook and Instagram people are now sharing pictures of all sort of things.
And if you are not careful you will be drawn into comparing their lives and your life.
You will soon find yourself wanting what they have in their lives.
This “wanting ” and “comparing” will force you to take out debt just to be on the same level with others.
The older generations call this keeping up with the Joneses.
4. Failure To Have A Budget
Without a budget it difficult to know where your money is going.
Working out your budget every month will help you see:
how much you are spending
how much income you have coming in
how much you are paying toward debt
how much you are putting aside for savings
Failling to use a budget can mean that you can never get out of debt.
A budget is an essential tool that everyone should use regardless of one financial circumstance.
Take control of your money by taking time to plan your budget every month.
5. Paying Only Minimum Payments On Credit Cards
Credit cards are good only if used the right way.
Paying only the minimum payment on them is not a good idea as it will take you much longer to pay off your credit card.
If you take longer to pay your credit card it means that you will end up paying more interest than you should have paid.
Consider paying a bit more on your credit card than paying just the minimum payment each month.
Over to you…
Do you know how much debt you have?
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