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5 Warning Signs You Will Never Be Debt-Free
You Use Credit To Cover Emergencies
Many people assume they will never be in debt, but it is possible for even the most well-managed accounts to get into trouble. Even when you're well aware of how to stay on top of your finances, you can easily get into a slump that causes financial problems. That's why it's so important to be financially prepared before things get out of hand.
You Think Debt Is Just a Part of Life
One of the biggest reasons people get stuck in debt is because they believe that debt is just a part of life. Debt, like other needs, can be overcome by pursuing the right alternatives within the financial system. A 2015 Pew study found that 7 out of 10 people said debt is a necessity in their lives. However, debt is a result of wanting or needing something that you don't have the cash to buy at the moment."
You Make Only Minimum Payments
Paying more than the minimum on credit cards and other types of debt can be difficult. If your balance continues to grow while you're paying the minimum amount required, it will be hard to eliminate this debt.
For example, a person with a $5,000 balance on a card with an interest rate of 17% and making minimum monthly payments would take 189 months, or nearly 14 years, to pay off their debt.
Meanwhile, interest on the balance will have them paying over $4,000 in the coming years.
You Don't Differentiate 'Wants' and 'Needs'
The difference between a want and a need can be a fine line. In a situation where you need a new TV, you may not be able to afford the large screen but still want one.
When you're shopping at Best Buy, you may have a hard time experiencing the difference between a 55″ and 65″ television. But once you're at home, you realize you won't need that big of a screen.
You Don't Track Your Finances
If you aren't watching where your money is going, it's easy to overspend in certain areas and then not have enough money for your monthly bills or a rainy day. Keeping track of your expenses is critical to avoiding financial ruin.
Checking your accounts daily can help you stay on top of your finances. To easily monitor your accounts, download an app that links all your financial accounts in one place.
Related Posts
5 Warning Signs You Will Never Be Debt-Free
You Use Credit To Cover Emergencies
Many people assume they will never be in debt, but it is possible for even the most well-managed accounts to get into trouble. Even when you're well aware of how to stay on top of your finances, you can easily get into a slump that causes financial problems. That's why it's so important to be financially prepared before things get out of hand.
You Think Debt Is Just a Part of Life
One of the biggest reasons people get stuck in debt is because they believe that debt is just a part of life. Debt, like other needs, can be overcome by pursuing the right alternatives within the financial system. A 2015 Pew study found that 7 out of 10 people said debt is a necessity in their lives. However, debt is a result of wanting or needing something that you don't have the cash to buy at the moment."
You Make Only Minimum Payments
Paying more than the minimum on credit cards and other types of debt can be difficult. If your balance continues to grow while you're paying the minimum amount required, it will be hard to eliminate this debt.
For example, a person with a $5,000 balance on a card with an interest rate of 17% and making minimum monthly payments would take 189 months, or nearly 14 years, to pay off their debt.
Meanwhile, interest on the balance will have them paying over $4,000 in the coming years.
You Don't Differentiate 'Wants' and 'Needs'
The difference between a want and a need can be a fine line. In a situation where you need a new TV, you may not be able to afford the large screen but still want one.
When you're shopping at Best Buy, you may have a hard time experiencing the difference between a 55″ and 65″ television. But once you're at home, you realize you won't need that big of a screen.
You Don't Track Your Finances
If you aren't watching where your money is going, it's easy to overspend in certain areas and then not have enough money for your monthly bills or a rainy day. Keeping track of your expenses is critical to avoiding financial ruin.
Checking your accounts daily can help you stay on top of your finances. To easily monitor your accounts, download an app that links all your financial accounts in one place.
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