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7 Money Mistakes that Will Put You in Huge Debt

7 Money Mistakes

If you are having financial issues that never seem to go away, think of mistakes that you could be making to keep you broke. Earning a decent income is never a sure way to be out of debt. In fact, many people who have a good income never seem to have any money. They look for different forms of debt relief Innisfil to pay off what they owe. Here are a few common mistakes that could possibly be the reason why you’re always broke.

Buying stuff with credit cards

Research has shown that people who shop using credit cards instead of cash spend 12% to 18% more. Buying with a credit card is likely to put you in debt when you don’t end up making payments on time. Pay with cash to avoid impulse spending and save on items such as grocery.

Making minimum credit payments

If you make minimum payments on your credit cards, it will take much longer to pay off your balances. Therefore, try and make higher payments so that you can also cut back on interest rates. If you have multiple credit cards then making minimum payments would mean it will take a much longer time to pay off your credit card debt.

Spending money on a new car

New cars don’t come cheap. Many people who buy a new car every three years or so, spend a huge chunk of their income paying for the car. Spending half of your income paying for a car makes no sense. Don’t fall into that trap assuming that you will get back your money when you sell the car or trade it in. Cars depreciate faster than most assets; so it loses its value every year. Cars are also an expense because they need maintenance, insurance and gas.

Poor management of your finances

If you don’t pay attention to your finances, you’ll always be broke. Once you receive your paycheck, what next? Are you the kind to spend all your bills and quickly waste what is left over? You need to keep track of your spending. Work out a budget that will help you to save more every month.

Staying in expensive debt for too long

If you have a loan or a credit card that has a very high interest rate, look for ways to clear it fast. You may even consider debt settlement Innisfil to get out of debt fast. If the debt has high interest, it may consume your monthly income so clear them first.

Renting a home you can’t afford

Many people choose to pay a high amount of rent instead of making a down payment to own their home. Don’t buy the best house you can afford when working, if your income drops you may be unable to afford the house together with car payments, credit card debt and other expenses.

Costly hobbies

Having a hobby is always recommended but make sure it doesn’t drown your pockets faster than you can imagine. Remember that hobbies are just optional activities so reconsider them when you’re broke. There are certainly ways to enjoy the same thing and spend less.

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