When you are in debt, certain financial habits will make it tougher to pay off what you owe, or worse, those habits could drive you into further debt. If you are not making any progress paying off your debt, it could be due to one or a combination of these things. Keep reading to know more about which financial habits you have to avoid.
Continue to Make Credit Card Charges
If you keep using your credit card when in debt, it will undo any progress you have made toward paying off the amount you owe. If you are not paying relatively more toward your debt than what you are spending, then what you owe is growing. Cancel, cut down the number of or throw away your credit cards if you are unable to control card habits.
Ignore Your Card Bills
Here is what most people wish: if only ignoring their credit card bills made these go away. Truth be told, we would pretend not to notice our financial obligations. Unfortunately, when you ignore your credit cards, there is a financial storm brewing. Your minimum payments add up, balances grow, and credit gets worse each month. Open your card statements, even when you have set up autopay, to know how your monthly payments are affecting your balance.
Pay the Minimum Alone
There is an exception to the rule, and that is when you are paying a lump sum amount of money to a card while making the minimum payments on other cards. Otherwise, paying the minimum amounts is the worst possible thing to do when you are in debt. You will need to pay an amount above the minimum to pay off all credit card debts in the end.
Spend Money Frivolously
The pressure of being in credit card debt can sometimes make spending wisely a hard thing to do. However, this is an important time to pay close attention to how you are spending money. Every single dollar you spend on something insignificant is an amount you could have used to reduce the existing debt. Plan your spending with a budget and track your costs to spot where you are spending money unnecessarily.
If you have access to savings, then you can avoid going deeper into debt. Just like you have to pay your electricity bill and mortgage monthly, you have to put dollars toward savings and debt.