Do you think that you have good financial habits which will help you stay away from debt forever? Even if you plan a budget and try to live within your means, you may have certain habits which might lead you to face debt problems. Check out whether or not you have these habits, which may help you realize and change your habit, if required, in order to have a financial future without having to worry about debt.
- Not paying heed to pay bills timely - You may think that skipping to pay bills for one or two months, but you'll never understand when this will become a habit, and in no time you'd realize that you had piled on debt. The interest rates on credit cards are comparatively higher; so, if you do not pay your bills every month, you'll have to pay interest on the unpaid amount. Moreover, you might face problem to repay debts when you have multiple bills and quite a big amount to pay off. So, always try to repay your bills at every billing cycle.
- Being extravagant than what you can afford - If you have this habit, then it is quite likely that you'll experience debt problems in near future. Therefore, you should always plan a budget so that you can spend according to your means along with meeting your daily and other necessities. You should allocate definite amount on each item so that you know when you're spending more on any item.
- Taking out loans to pay off existing debt - Sometimes people take out a consolidation loan to repay remaining debts. However, if you opt for a consolidation loan or balance transfer method, then know the ins and outs of the options; also use such options if you think it is the best suitable one, and you'd be able to manage it properly and pay off all debts. For example, if you opt for balance transfer method, then be sure that you'd be able to repay the entire balance within the lapse of the low interest rate period. And, if you decide to take out a consolidation loan, make sure you obtain a low interest loan so that you'd be able to repay the entire debt with ease.
- Using plastic money to buy each and every item - Definitely it helps to build good credit record if you use your credit cards and repay your bills at every billing cycle. However, this does not imply that you need to buy each and every item with your credit card. If you develop the habit of substituting cash with credit cards, then it might become difficult to manage multiple credit cards and you also might not be able to repay entire amount at every billing cycle.
Apart from above, do not hide your financial situation from your creditors when you face any financial hardship. If you're facing financial hardship, then alert your creditors about your situation and request them to lower your credit card interest rates or extend the payment deadline, if possible, for a certain time period. If they agree to do so, then it will help you manage your financial situation without falling into debt problems, which in turn, will help you take full control over your personal finance.