There are numerous reasons why people get stuck in a perpetual cycle of debt but anyone can get out of it.
Here are the most common reasons:
- Not paying off the principal on credit card debt.
- If you are only paying the minimum amount, your debt will become unmanageable if your balance keeps growing.
- Increase the amount you are paying
- Try and pay the balance every month if possible
- Credit is not your money, start seeing it that way.
- Taking Holidays you can’t really afford.
- Many people rely on credit to cover spending on holidays.
- Avoid spending time with people that tend to overspend
- Consider taking holidays that are within your means
- Faulty Mindset- Debt is not a natural part of life
- Bad debt often results when wanting/needing something out of your means.
- Bad habits ensure when you borrow and pay a premium to do so.
- Start keeping tabs on spending and stick to a budget.
- Not having contingencies
- Too many people have absolutely no savings and rely on credit cards when unexpected things arise
- This means you always end up paying more than the original cost
- It makes far more sense to set aside money for a rainy day, as much as possible.
- Expenses Rise with your income
- This is not a good idea if you’re still carrying debt from before your income rose.
- Pay off previous debt before taking on more expenses, otherwise debt will simply balloon out of control.
In a nutshell:-
It requires discipline to manage debt the right way, creating a budget and sticking to it. Use the want/need principle when considering splashing the cash and using credit, otherwise you may never get out of the debt cycle.
