Eliminate debt is more than just a financial problem. It can be a disease that impairs your physical and mental state and keeps you from living life to the fullest. While there’s no easy cure for this disease, you can prevent further complications through simple lifestyle changes. One way is to keep yourself from the things that make the eliminate debt worse.
If you’re diagnosed with insomnia, doctors would recommend avoiding caffeine. If you have diabetes, give up sweets. And if you have eliminated debt, just like other diseases, we advise you to avoid these 7 things before its weight becomes unbearable.
1. Overspending and bad credit behavior
Loans have established a bad image in today’s consumer-driven world. The truth is, financial disasters often take place once these privileges landed on the hands of unwise consumers.
If you’re going to pay off credits or cash loans, you can avoid further eliminate debt in three ways. Firstly, plan your spending and stick to that plan. Make a list every time you go shopping. Remind yourself to save more and spend less by choosing the cheaper options and refraining from unplanned expenditures.
Don’t bring credit cards unless it’s necessary. Put the card in a sealed glass container (and put a “break glass in case of emergency” sign) or freeze it in ice. It allows you to rethink about your expenses and certainty that you can pay off the credit immediately.
If you consider yourself as an impulse shopper with a low or unstable income, the best option is not to sign up for credits or loans. Use cash instead. Rewards are useless when late and insufficient payments bury you in interest rates and charges.
2. Skipping payments
They say that “big things come from small beginnings.” Unfortunately, this doesn’t sound comforting when related to debt. Huge eliminate debt that tend to paralyze the payer often come from simple failures: not paying amounts on time and not paying in full.
Come up with a plan. After determining your eliminate debt and the amounts owed, try to organize them based on interest rates. Prioritize and pay first the ones with the highest interest rates and variable rates. As much as possible, minimize the “minimum payment cycle” and overpay your debts on time or even earlier. Try to pay off weekly instead of monthly not just to improve your credit score but to keep yourself from temptation and become debt-free faster.
3. Transacting with deceptive lenders
There are two types of lenders – the one who makes cash loans work for you and the one who makes cash loans work against you.
If you need to take out necessary loans, make sure to find reputable lenders. If they sound too good to be true, they probably are. Some of the online loan scams you shouldn’t fall for include malicious websites, upfront fees, very high-interest rates, nasty charges, and not caring about your credit history.
As a customer, you have the right to be treated fairly. Check your terms and conditions regularly. Understand the charges you must come across, like interest rates and penalty fees.
4. Gambling
The deadliest kind of vice isn’t always the one that burns your internal organs but the one that corrupts your mind. Gambling, one of the leading causes of debt, is the best example.
Gambling is a guaranteed exchange of money from you to “the house.” The idea of striking it rich effortlessly is addictive. You tend to be oblivious of the consequences of mortgaging your future to win back what you’ve lost.
Of course, it is urged not to be engaged in gambling. But if you’re already addicted, you need to seek serious help outside of this article.
5. Risk of job loss
Thinking you’re invincible, even when it comes to job loss, is deadly. There are some things you can’t control. You may run the risk of losing your primary source of income when you get fired or if your company goes bankrupt. Or when you’re required to stop working to care for someone. You may also drain your savings and fall into debt when you experience a terrible accident and become incapable.
The best thing you can do is to secure your finances before unemployment strikes. Manage to put a decent amount on your savings, emergency, and retirement funds. Having insurance can also save your life. Lastly, it’s suggested to live below your means even when the money is good.
These will help you survive while looking for your next job without relying on loans and credits and increasing your debt.
6. Exposure to advertising
“Buy this to be more beautiful”, “everyone has this thing”, “call right now to get a discount”, “this item will change your life”, and more – these are just some of the ideas advertisements plant in your head.
Advertising plays with your psychology and leads to overspending. It makes you want to consume more of everything – even if you don’t need it and you can’t afford it. Companies, whose primary concern is to sneak into your pockets, will try to manipulate you into believing that you need their products to keep up with everyone. These advertisements can be dangerous because it can harm not only your finances but your mindset and self-worth as well.
Don’t allow those advertisements to dictate your values. Ask yourself why you spend. Is it truly necessary? Or can it be skipped for now?
7. Lack of insurance
Medical costs have long been one of the leading causes of bankruptcy. Facing an illness or injury without coverage would be extremely devastating.
While you can’t predict how your health could change in the future, you could put certain safeguards in place to help mitigate the risk of financial disaster. Securing health insurance today is the first step. It’s also crucial to have an emergency fund to avoid touching your hard-earned savings in times of trouble.
Author Bio: Mina Natividad is a resident writer for Quick Cash Loans, an Australian-based business, providing short-term cash loans for your borrowing needs. She is passionate about writing articles regarding personal finance and money hacks.