Borrow less, for credit’s sake
Identifying Habits That Cost You Money
Welcome back to “Repair Your Credit.” Last time, you saw that the people who use personal loans to keep their credit rating in order aren’t all that different from you and me (demographically). This time, let’s start getting down to the nitty gritty of spending and borrowing habits. The more you get these under control, the more likely you are to step out with good credit.
Let’s start off with a recent survey whose results appeared in USA Today. “If you were given an extra $1,000, what would you do with it?” was the question. Imagine it’s a gift, a stimulus check, or anything else. Here are the results of the poll:
- Save it! (31 percent)
- Pay off debt! (24 percent)
- Splurge! (20 percent)
- Buy essentials! (16 percent)
That sounds smart, doesn’t it? If only one in five people (20 percent) are going to splurge on an impulse buy, that means 80 percent are thinking conservatively, in preparation for a rainy day. We’re certainly there now with the current recession, aren’t we?
Asking yourself tough questions
I think the percentage of impulse buys would be higher, honestly. It’s exciting to spend what amounts to found money, isn’t it? If you’re one of the impulse buyers, step back from the adrenaline rush for a moment and consider your situation. If you can answer these questions in the affirmative before having fun with your money, you’re ready to go
- Are your debts paid off?
- Do you have a savings cushion?
- Have you taken care of your immediate needs?
Let’s be realistic
If the answer to any of the above questions is “NO,” you’re making the wrong decision. No doubt about it. Splurging is fun if you can truly afford it. Unfortunately, most people can’t, and they make themselves slaves to credit, borrowing and the general attitude that saving is something the other guy does. Did you know that the average American owes over $8,000 in consumer credit card debt? In recent years, that’s been trending upward.
There are lots of bad habits that lead us into debt. If you find that you can personally identify with any of them, take charge now to repair your credit and build more productive financial habits. Such a strong foundation will help you now and protect you against problems in the future.
Have you considered your budget?
Do you currently have a monthly budget or some kind of plan for your expenses and financial goals? If not, get to stepping! A budget is for anyone, not just somebody who needs help staying above poverty level. Having a budget is essential to becoming a financial success and keeping your credit grazing in green pastures. It doesn’t matter if you make $20k, $100k or more per year, a budget can help you recognize just where your money is going each month. You may be able to float from day to day without a budget, but you won’t be on course toward your financial goals. CLICK HERE to keep sailing…
