Being in debt is dreadful. Anyone who has been in debt knows that feeling well. Debt is not that bad if you can pay it off within the given time. But, paying off debt on time is a tough job. However, it’s not impossible. You just need to overcome your habits that are keeping you away from paying off your debts on time.
The list below shows certain money mistakes that are keeping you in debt. Moreover, you must try to avoid these to become debt free. Have a look:
Most of you forget to pay off your credit card bills on time. Result? You acquire late fees, your credit score gets hurt, and you pile up debt. According to Jeanne Kelly, the Author of The 90-Day Credit Challenge, “You also might start paying larger interest rates on your credit cards or loans all because you don’t realize how late payments are hurting your credit score. Make it a priority to pay your minimum payments on time". Remember, one day you’ll fall into a debt pool if you keep forgetting to pay off your bills on time.
Most people don't know how to consolidate their debts or don’t take necessary steps to become debt free and hence, they remain stuck in the debt trap. In these situations, it's best to get help from FTC compliant law firms offering debt relief services to people. OVLG has been helping people to pay off debts since 2007. Just call at (800)-530-OVLG and get help now.
Another thing that will keep you in debt is not paying your taxes. The longer you don’t pay your taxes, the more it’s going to cost you with its penalties and interest on a monthly basis. If you haven’t paid your taxes yet, then you must talk to a licensed tax professional that will cost you nothing. However, the go od news is that the IRS lets you pay your delinquent balances through methods like installment agreements or a tax debt deduction.
Living without an emergency fund is the biggest mistake you’re making. What will you do in case of a sudden job loss? How will you support your family? You should be prepared for any emergency in your life. Draining your savings accounts or borrowing money from your 401(k) account will push you into debt if you can’t fill it back. You must save at least six months of living expenses for your rainy days.
This is another way by which you can fall into debt. Though credit cards are more convenient than cash, you can pile a huge amount of balance if you don’t pay the credit card bills on time. Using credit cards for every purchase is not good. If you can’t handle your credit card bills properly, then you must use cash while shopping to avoid falling into debt. Credit cards are good only if you can pay off the bills in a timely manner.
Without a proper budget, there’s a chance that you’ll fall into debt. It’s because you don’t have a record of your financial whereabouts. Hence, you have no evidence of how much money you’re spending or saving. That’s why you must set a realistic budget for yourself according to your earning. A good budget will help you to pay off your credit card debt and do savings at the same time. Drafting a budget is easy, but following it is tough. Whatever budget you set up, make sure you stick to it. Patty Cathey, an Investment Adviser, at Smart Retirement said,“If you can stop paying 19 percent interest on a credit card bill each month, that’s like earning an extra 19 percent.”
What will you do if they don’t pay you back at the time of your need? Yes? Think about it first and then lend your money to your relatives. According to Rakesh Gupta, credit advisor and director at ARG Finance, “There are other ways of helping someone out, like bringing them lunch till they are stable or helping them update their resume to get a better job.” So, before you help others, make sure your financial footing is strong.
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