Are You In Debt Management Mode?
How often do you think about your personal debt? Most of us typically don’t really start thinking about it until our debt becomes unmanageable and we need to kick into debt management mode. At that point we feel a bit helpless because it feels as if our debt is controlling us. Living in debt overload is filled with anxiety and frustration. Some people seek professional debt management help due to the uneasiness of debt overload. Debt management help is okay, but what if you could change your debt load by yourself? When you are buried in debt and pulling your hair out, it’s easy to dismiss your spending habits, but they are the key to digging out. So if you are serious about getting a handle on your debt, take a look at your spending habits.
Credit Card Management
When your personal debt gets to the point where it is out of control, it is so easy to forget about how you got there in the first place. You can’t remember half of the stuff you bought; but you know that you did buy things because you have credit card balances to prove it.
If you are overusing your credit cards, take note because that is a big red flag. Charging every single purchase to your credit cards can be the first sign that you are headed for debt overload. More alarming should be if you are using your credit cards for even the most basic of purchases such as coffee-on-the-go or a quick run through your local drive thru. When you are making those small purchases forget you even have a credit card and just use cold-hard-cash.
No one likes to waste money, but you could be wasting a lot of your money without realizing it. If you are just making the minimum monthly payments on your credit card balances, you are wasting your money. By the time you factor in the interest you pay on your credit card balances you are probably doubling or even tripling the price of whatever you bought with that credit card. And the debt on credit cards can take a very, very long time to clear up, so the wasting of your money never stops.
Another money waster is the damage that debt has on your credit scores. Low scores cost more. If your credit scores are below 750 you will pay more for auto loans, student loans, mortgages, rent, auto and home insurance and even your utilities. If you want to save some money, work on improving your credit score. Now if your credit score drops anywhere need 300, you may not be able to fix your debt overload issues by yourself. You may need debt management help to get yourself back on track. And that’s okay because debt management services are there to help you back on track and make your debt is more easy to manage.
How To Better Manage Future Debt
Once you dig yourself out from under that heavy burden of too much debt, you probably do not want to go back. So what do you do? Well adjust your spending habits. In the future only buy what you need, not what you want. Yes you want a new pair of shoes for an upcoming party, but do you need a $200 pair? Next, only charge to your credit card what you can afford to pay off each month. In other words, if you cannot pay it off, you cannot afford it.
You can work on getting better at budgeting your money. Create a budget that you will stick to and actually stick to it. Don’t use the budget as a way of punishing yourself, use it as a way of monitoring your spending. If an item is not on the budget, do not buy it. You only earn so much money, so spreading it out to meet all of your expenses can be tough, even for the most frugal of us. A budget helps you see the big picture.
If you can create an emergency fund or rainy day fund you may not be tempted to use your credit card for everything. Relying on credit cards for every single purchase just comes back to bite you in the end due to the cost of interest on your balances, like we mentioned above. Start small. Every time you get some odd change put it into a savings account at your bank and before you know it, you will have a good size pot of money.
Easy, Not So Easy
Piling on the debt is easy, trimming it back, not so easy. Things are moving along nicely, you’re shopping and buying the things you want and before you know it, you’re looking for a debt management company. It is difficult to dig out of debt, as you may realize. If you cannot do it yourself and you need some debt management help, don’t delay, find a debt management company that you are comfortable with. You will make matters worse if you do nothing. So make the call, you will be glad you did.