Avoiding debt is not always an easy task especially with the financial flexibility that’s available to us today. An increasing number of people are choosing to pay by plastic and opting to choose an automatic payment and subscription-based model for their services. This can make it very easy to start accumulating debt fast. Living a debt-free lifestyle can really help you enjoy a life without stress. In a society that focuses in on consumerism, managing your money today can be more difficult than ever before. Here are some unexpected ways you can fall into debt:
As you start to finance various purchases or even start paying for subscription-based models, it can be difficult to start tracking your money over time. You might be surprised how much you’re actually losing out on and how much you are accumulating in interest by choosing to pay via plastic. A zero interest plan can seem like a great idea with upfront financing but if you don’t pay it off in time, you could face a massive amount of interest when the loan is due. If you have continued to refinance various offers or simply let some of the items that you financed, continue to sit unpaid, your debt can rack up very quickly. If you can’t afford something upfront you may want to consider saving for it rather than instantly financing it. Growing your debt can happen quickly when you continue to finance your purchases.
Monthly Subscriptions Debt
Monthly subscriptions are everywhere today. You can see a variety of low-cost fees for monthly subscriptions and even the option to pay off various products in a monthly subscription-based format. When people really start to examine their spending over the course of a month they can be surprised to know how much they’re actually spending on services that they may not need. $9.99 a month may seem like a very small amount to pay for a music streaming service but when you add in two other video streaming services, a monthly subscription for your phone, a monthly subscription for your gym and more, it becomes easy for your subscriptions to start adding up. It’s not unusual for someone to be spending several hundred dollars every month in automatic subscriptions. Saving some of this money instead of having it automatically come out for a subscription could be an excellent way to you could start to pay down your debt. If your monthly subscriptions regularly come out of a credit card, this can only work to increase your debt especially if you aren’t paying down the monthly costs of each subscription.
A lack of Budgeting and Financial Planning
Simply spending money as it comes in will never leave you further ahead. It easy to start recognizing problems with your finances up front if you are willing to track your finances over time. Teaching yourself some of the basics of budgeting and making sure that you are not overspending can help you to manage your debts. Proper financial planning means checking out how much money you’re spending, how much money you have coming in, and how much you’re going to be spending on paying down your debt. There are plenty of ways that you can create a strong fiscal budget as well as applications that you can use for paying down some of your debts are working towards financial goals. As you continue to revisit new financial goals and use budgeting and financial planning, you can make sure that you never end up left extremely far behind due to a lack of planning.
Keep some of these unexpected ways you can fall into debt in mind when you are trying to work your way. It can be quite easy for you to start stacking up debt if you don’t have the proper financial plan in place. Avoid some of these top pitfalls so that you can make sure you will enjoy a brighter financial future that is free of overspending.
If you have fallen into debt and not sure how to move forward contact us today for a free consultation!