Dept, the 4 letter word has one of the most horrendous impacts on anyone and everyone. Small, large or uncontrollable, a debt is a debt and can be quite appalling for an individual’s financial planning. Actually, a debt is a byproduct of improper financial planning or worse, ignorance about the fact that finance and planning actually have to meet to form the basis of financial independency.
Using 3 credit cards with decent limits instead of 1 credit card with a good limit isn’t a very good idea. Credit cards work on the concept of cumulative and revolving credit systems, so credit card usage is directly proportional to bad debt. A wallet with no credit card is the best practice towards financial stability though. For people who feel paying through cards is convenient, you can pay all your bills (petrol, dining, electricity etc) via a debit card as well.
Reviewing your financial transactions will help you to differentiate between necessary expenses and JLK (just like that) kind of expenses. This will also help you to plan and eventually save a lot of money. Always remember that money doesn’t grow on trees and you are paid for taking that work related stress from Monday to Friday.
Equipment and other items are normally bought as per the requirement; at times the requirement is so scarce that the concerned item just rusts somewhere in the house. ‘Why buy a cow, when milk is cheap,’ goes a famous saying. Likewise, you can actually save a lot of money and space, if you hire a service which you need once in a blue moon. This way, you don’t have to buy the necessary equipment.
Also, many people buy things as spare or just because they are getting some things at lower rates, may be due to an end season sale or some offers. To give a good example, if you buy 10 pairs of tie and wear only 2 of them, then either you think buying is a way of philanthropy ( towards merchants) or you are aware that you are a shopaholic and feed proud about the fact.
Most of us have at least 2 days a week where we suddenly realize how interesting it is to watch TV and enjoy the art of pass-time. Working part time for 3-4 days a month or even doing some online business by utilizing your skills will earn you more money than your same level colleagues.
We hardly have around 6 to 10 bills per month to pay, so it is advised to keep necessary reminders about the due dates. Best practice - the moment you get the bill, pay it. Paying fines is not charity, please understand.
All in all, a debt elimination program starts with proper planning towards clearing your debts which isn’t as difficult as your brains point out.