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For some people it would be hard to understand how someone who earns so much money, has a lot of disposable income, could wind up neck-deep in debt. But it happens, and it happens all the time. The culprits are some bad spending habits. I
"It seems so out of my hands," Marge, a technical support agent, confesses. "It feels like I wake up one day with all these accumulated debts. I know I make the effort to be less extravagant - I'm the "Sale Queen" for crying out loud - but still, I end up with monthly bills and debts that are so high. Month after month, I end up working to pay my debts off and it doesn't seem to end. I feel like I'm in the middle of a carnival ride that I can't get out of; and it just, you know, goes on and on."
Matt, a customer service rep, said, "My life seemed so easy, picking things up at the store or anywhere else when I use my credit card. And then when I get all my billing statements, it turns into a nightmare."
Angie, another call center agent, said that it has gotten to the point that she could not get any sleep because of her worries about her debt. "Every time the phone rang, I would cringe, thinking that it's another one of those people calling me about my credit card problems," she added
This is clearly a case of getting in over your head in debt and the first thing to do is to take the time to start doing an honest, accurate tracking of your expenses. From that tracking, which can be done through a software or just manually by a notebook, you will begin to find out more about your spending habits and the problematic areas. Very soon, your inner warning bell for bad spending will be activated and you will have some control over your spending habits.
How to Find Out If You Might Be Digging Yourself Inot a Debt Hole?
1. Check your bank account. If your savings are constantly depleted, you are most likely living beyond your means and are most likely in debt all the time.
2. More often than you would want to admit, you are late in credit card payments, bill payments, and other expenses.
3. You have not sat down to actually calculate how much total debt you still have to pay off.
4. Your bank account or accounts are constantly overdrawn and your checks often bounce.
5. You are in denial about your spending habits and your debts, or you are not exactly truthful to friends and family about your spending and the debt that you have been accumulating.
6. You have no idea exactly how a credit card works.
7. You continue using the cash advances from your credit card and possibly other credit cards to pay your other bills. Worse, even while you are trying to pay off your credit card debt, you still use that same plastic to buy stuff.
8. Month to month or week to week, your credit card or one of your credit cards is near or over the credit limit.
9. Every month, you only pay the minimum amount on your credit card/s. This means that every month, you have some leftover credit card debt, which will, naturally, earn interest and will become a bigger debt each succeeding month. "
`If you find that you checked or said yes to even just one of these nine things, you need to really stop all the spending and focus your efforts in formulating a plan to pay off your debts the soonest possible time.
How To Be Free From Debt
1. Resolve to pay off your debt. There is no other way to do it. Your debt won't go away on their own. You have to make it go away.
2. Devise a debt payment plan. It doesn't have to be too complicated. It just has to be practical. List down all you owe and to whom. Then arrange them, largest balance first. Beside the amount, write the minimum monthly payment required and the interest rate of the debt. You'll have a clearer idea after doing this.
3. If you are up to your neck in debt, there is obviously something wrong with your spending habits. Find out where things go wrong with your spending by keeping track of every single thing you buy for a period of time, a week for example. This record will reveal how you overspend and how you get into debt.
4. This spending tracker will also give you an idea on how to live within your means. It will help you devise a spending plan, which is about the things that you NEED to buy as well as the debts that you need to pay off.
5. Set aside at least 10% of your monthly salary. Say, if you are earning P20,000 a month, save P2,000. Put it in the bank and DON'T touch it. This way, if an emergency comes up, you don't have to borrow money or apply for a loan - which will sink you deeper into debt.
6. Have someone (a trusted friend, or boyfriend/girlfriend) check your finances every now and then. Most of the time people who are deep in debt think people around him don't care especially when it concerns money. Someone checking how you budget your money makes you feel loved and important.
7. When you have paid all your debts, surrender all your credit cards. Plastic money is only good during the first few purchases. But when you become `incomplete' without them, this means that 'plastics' are taking over your life.
8. Do not entertain friends, colleagues, officemates or even callers from different companies offering zero interest loans, services, low-cost items and the like. If you get swayed by this sweet talk, good luck, welcome back to the `Hidden Club,' a place (actually a running joke) for people who hide from debtors.
9. Don't ever buy on impulse. This happens when big malls mark down their items to attract buyers. Don't get mad just because there's a midnight madness sale.
10. Love yourself. If you do, you will not let something bad or disgraceful happen to your self.:)
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