Money is a part of everyday life. The success you have with money depends largely on how you manage it.
With the increased ability of using credit it is becoming easier to get into debt trouble.
Five bad spending habits to break to save more of your money are
1) Spending money you don’t have
It is easier than ever to obtain credit cards and loans now. Some people consider credit card debt as “free” money and can be paid back whenever they want. They find out quickly that each month they are charged interest on the balance that is still owed. Also, if you don’t make payments you will be charged a penalty each month in addition to the interest.
2) Spending more money than you make
With the use of credit it is easy to spend more than you make. You may think it is alright to use you credit cards to cover some extra expenses once in a while but if you get in the habit of using credit cards you may quickly get into trouble.
3) Using credit cards when you have cash
If you begin using credit cards when you have the cash available you may get in the habit of using your credit cards too much and spending more than you can pay back each month. Some people consider purchases made with a credit card as “free” money for the month, until the bill is due. However, if you end up spending more than you can pay back you will owe finance charges.
4) Using credit for everyday purchases
It may seem like a good deal to use your credit cards for most purchases to get the airline miles or card dividends. It is advised to consider the consequences before doing this. Studies show that many people spend more when they use credit than they do when using cash. When you are using cash you are more conscious of how much you are actually spending.
5) Using debt to pay off debt
It may seem convenient to transfer credit card balances to one card if it has a lower interest rate. Many credit cards charge a transaction fee to transfer credit card balances to another card. Also, if you are considering taking out a loan to pay off your credit card debt, there may be a down payment needed for the loan. It is important to consider whether these additional costs will negate the savings from transferring your debt.