Nobody plans on getting into debt but it happens to a lot of us. Once you’re in debt, it’s so hard to get out of so you want to avoid it where possible. In some cases, people get into debt because they’re reckless with their spending and they start borrowing money for things they don’t need. They don’t realise they’re doing it at the time and before they know it, it’s too late. If you’re going to avoid getting into debt in the first place, you need to know the most common reasons that it happens to people.
This is one of the easiest ways to land yourself in financial trouble. If you get hit with a bill out of nowhere and you don’t have the money to pay it back, you might end up borrowing money to cover it. But that should be a last resort option. First off, you should be putting money into an emergency fund every month so when this does happen, you have the money there to pay that bill right away. Even if you don’t have an emergency fund, you shouldn’t resort to borrowing right away. The first thing you should do is challenge the bill because there’s always the chance that it might be wrong. If it is correct and you owe the money, ask them for an extension so you’ve got a bit of time to get the money together. A lot of companies are more accommodating than you think.
If you don’t earn enough to cover all of your monthly bills, borrowing money is inevitable. But that doesn’t help the situation because you’re just adding another payment onto the pile. That’s how you become reliant on credit cards to get by and get stuck in a cycle of debt. If you’re going to avoid getting into debt then you need to find a way to earn more money. Getting a new job or asking for a raise is the obvious choice but that’s not always possible. If you’re struggling to get by, there are plenty of quick ways to make money on the side. If you can spend your evenings earning a little extra cash by filling out surveys online or driving a cab, you can avoid having to borrow money and getting yourself into debt. However, this is only a short term solution while you find a better way to earn more cash.
Christmas is a time for friends and family but it also involves spending a lot of money. Sometimes, people go overboard and end up spending way more than they need to during the holidays. But the money isn’t the most important thing and you can still have a great time without maxing out your credit cards. Why not consider having a debt free Christmas this year instead? Your friends and family will still be grateful to you either way, you don’t have to spend loads of money on them to show them that you care.
Now that you’re aware of how people get into debt in the first place, you can avoid it a lot easier.