When do we spend our money on every month? Bills, food (for home preparation), and housing are essential, but what else entices your wallet, purse or satchel to make an appearance? Clothing and shoes, jewelry, dining out, streaming services (tv, music, movies, etc.), gym subscription, internet and vehicle loans are possible contributors. You may be able to think of a few more unique to your life.
We endure a neverending call to spend our money from credit card offers to the latest streaming blockbuster and the 24/7 bombardment of advertisements. But what comes from not having a spending limit? Debt. What increases when we say, “I’ll pay that off later?” Debt and the interest that debt accrues. Continuing that cycle if far too easy to get trapped in, and it’s not nearly as easy to escape.
Debt is an overbearing presence that can creep into our lives due to unemployment, divorce, medical bills, and, yes, poor money management. While the other reasons are usually unavoidable, spending money like it’s burning a hole in our pockets is avoidable.
The allure of credit cards
What form of money do people without a strict budget, emergency fund and savings utilize to in times of distress, or when an appliance needs replacing? Credit cards.
What form of money is most commonly associated with overspending on frivolous items? Credit cards. Those pesky credit card offers that show up in our mailboxes three times every week are to be met with caution.
There is no problem with having a credit card, and they can have benefits if they are managed correctly and paid off every month. A great way to get the most out of a credit card’s reward system is to find one that rewards you for doing things you did before that card entered your life, like getting gas or buying groceries. The trick is to pay off the credit card bill directly after you use it. You were already spending that part of your budget before you had a credit card, but not you are getting rewarded. It’s when you brush off the one expense that your brush off the next and so on until you are deep in credit card debt.
Being in credit card jail is no fun. Creating a budget and building up an emergency fund can help you slowly wrangle yourself free of your credit card debt. Always start by paying off the smallest debts first.
Sometimes debt becomes too much too bare and no matter what you do, relief seems like unreachable goal. If that’s the case, consumer bankruptcy can offer relief and provide an opportunity to rewrite your financial future.