It can be difficult to get out of debt, especially with all the financial freedom we have now. Many people choose to pay with their credit cards and opt for automatic payments or subscription-based models. This makes it easy to quickly start paying off your debt. A debt-free lifestyle will allow you to live a stress-free life. Controlling your money in a culture that is obsessed with consumerism can prove more difficult than ever. These are the top ways that you could fall into debt.
Financing
It can be difficult to track your money as you finance more purchases and even subscribe to a plan. It might surprise you how much interest you are accruing by paying with plastic. Although a zero-interest plan may seem appealing for upfront financing, if the loan is not paid off on time you could be subject to significant interest. Your debt could quickly mount if you refinance multiple offers or simply allow some items to be financed to sit unpaid. You might consider saving money instead of financing the purchase immediately if you are unable to afford it upfront. If you finance your purchases, your debt will grow quickly.
Monthly Subscriptions
Monthly subscriptions are very popular today. Monthly subscriptions are available at a low cost. You also have the option to purchase multiple products through a monthly subscription. It’s possible to be shocked at how much people spend on services they don’t need when they actually look at their monthly spending. Although $9.99 per month might seem small, when you consider two other streaming services, a monthly membership for your phone and a monthly subscription to your gym, your subscriptions can quickly add up. Automatic subscriptions can cost hundreds of dollars each month. It could be a good idea to save some money rather than having the subscription automatically payout. This can increase your debt, especially if the monthly subscriptions are paid out with a credit card.
Inadequacy in Financial Planning and Budgeting
Spending money as it comes in won’t make you more successful. If you’re willing to monitor your finances over time, it is easy to see problems in your finances. You can control your debts by learning the basics of budgeting. Proper financial planning involves determining how much money is being spent, how much money is coming in, and how much will be used to pay down your debt. There are many ways to create a strong financial budget. You can also use applications to pay down your debts and work towards your financial goals. You can ensure that you don’t fall behind if you set new financial goals, use financial planning and budgeting.
These top tips will help you avoid or get out of debt. If you don’t have a financial plan in place, it can be easy to pile up debt. These top pitfalls can be avoided to ensure a bright financial future and a free from overspending.
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This post was written by Trey Wright, one of the best bankruptcy Tallahassee attorneys! Trey is one of the founding partners of Bruner Wright, P.A. Attorneys at Law, which specializes in areas related to bankruptcy law, estate planning, and business litigation.
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