Your Impulsive Spending Needs To Stop

Are your credit cards on fire due to overuse? It’s a common affliction. However, if you don’t stop this behavior, it’s going to send you straight to the poor house. You also may be racking up interest charges, which means you are paying money to the credit cards for nothing.

To curb spending seems like an easy problem to solve. You track the amount of money coming in and compare this to the money going out. Do this for several months to notice any trends. If the money going out is greater than the money coming in, you are spending too much. In other words, you are living beyond your means.

However, it’s not as easy as just tracking money in and money out. Credit cards add complexity to the equation. You spend today, but don’t have to worry about paying it until the due date. If you time your purchase right, you have thirty days to pay.

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If you don’t end up paying the full amount owed on your credit cards, you are going to get hit with interest charges. These charges are usually in the double-digit rates. They can be as high as 20% or more. If you carry large balances, you will be charged based on them. If you let the balance get too big, you are going to find it difficult to pay it promptly. Therefore the interest charges build each month, and it’s how people get in trouble financially.

If you use all your income each month on your bills, you may think everything is okay. However, you must consider saving - both for the short term and the long term. You need to have emergency funds set aside. Experts suggest having at least three months of salary for such events. Some people prefer even more. You will also need to spend on larger expenses later, such as your home and college for your kids.  

If you have bad spending habits, these can be tricky to curb. Seek out the help of a financial planner or credit counselor if you have this problem. These professionals can put together a budget for you if you are not able to do it yourself. You will need to follow the advice they give you, assuming you trust the person’s advice.

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Try to stave off problems early on. It is much more difficult to manage when you have thousands of dollars in debt rather than hundreds. Besides, why do you want to continue paying hefty interest charges to finance companies? They get enough of your money as it is.