Debt Debugging – 4 Bad Financial Habits To Ditch

We all have our little luxuries: a morning latte or a new pair of shoes from time to time, for instance. A dollar spent here and a dollar spent there can add up over time and dramatically affect your bottom line. Despite your best efforts, it could be these little luxuries that are keeping you in debt. 

People who stay in constant debt often display similar financial habits. Identifying bad habits can help you avoid them so you can get out of debt for good. Here are a few bad financial habits to ditch and some good ones to replace them with:

Debt Debugging – 4 Bad Financial Habits To Ditch (And 4 Good Ones To Replace Them With)

1. Payday Loans

Payday loans have caused nothing but trouble since they came on the scene. Almost everyone who’s ever taken out a loan of this nature finds themselves even deeper in debt.

The Better Option 

The good news is, there are alternatives to payday loans that will help you get out of debt rather than contribute to it. If an emergency expense comes up, look for small loan lenders with low-to-no-interest loan options with flexible repayment plans. This will help you build credit, pay off the emergency expense, and not put you further in debt.

2. Impulse Buying

Most people who are chronically in debt make a habit out of impulse buying and then finding ways to justify it. Impulse buying makes you lose sight of your budget and leads to excess use of credit to pay for things you really can’t afford. 

The Better Option

Leave your credit cards at home when you shop. If you have to borrow or use credit to get something, then you can’t afford it. By leaving your credit cards at home, you force yourself to use your debit card or cash to make purchases. This practice will surely help you spend less since it’s real money used right now instead of credit that you’ll pay off later at a much higher cost. 

3. Emotional Shopping

If you’ve ever shopped because it made you happy, you’re not alone. Unfortunately, doing so regularly can be addicting, expensive, and a difficult habit to break. 

The Better Option

Before making purchases, check your emotions and figure out why you’re buying what you’re buying. Did you have a bad day, or do you really need it? If you can’t say you need the item, then put it back. 

It’s important to note here that emotional shopping can be an addiction that requires professional help to overcome. If you find yourself buying to make yourself feel better, it might be time to seek therapy to get to the root of your addiction. 

4. Paying the Minimum

Many people think that by paying the minimum payment on credit cards, they are getting out of debt. The reality is that paying just the minimum balance on a credit card keeps you in debt and costs you more in interest in most cases. 

The Better Option

If you have outstanding balances on your credit cards, you’ve got to commit to paying more than the minimum balance in order to pay them off and get out of debt. 

Starting with the card with the lowest balance, pay more than the minimum each month until it’s paid off. Continue paying the minimum on the others. Once that card is paid off, put all the money you would’ve paid to that card toward the next card’s balance and continue in this fashion until all cards are paid in full. 

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