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These financial mistakes are keeping you in debt

by , 18 September 2014

If you're like most people, you lack advanced financial planning skills. You've learned the basics of money management on your own. Or perhaps you've never even given money management much thought until now.

Whatever your age, you must understand that your current financial situation depends on the choices you have made in the past, just like your future situation depends on the choices you are making today.

If you don’t practice saving and spend money excessively, you risk ending up bankrupt, with debt that will take you years to pay off.
The following financial mistakes will keep you in debt for years to come, so make sure to eliminate them.
Financial mistake #1: Overusing your credit card
Careless, excessive spending begins with simple purchases made on your credit card. You’ll notice that you’re already deep in debt when it’s already too late.
Credit cards should be used within a limit and never for making regular purchases, such as paying for groceries or clothing items. Carrying credit card debt can destroy you financially, so it’s better to stay away from credit cards if you have the chance and only pay for things you can afford by cash or debit card.
Financial mistake #2: Spending too much on small luxuries and indulgences
You may not give that frappucino you buy each morning much thought, but the costs add up in time. All the small purchases you make on a daily basis (eating out, buying coffee and snacks, treating yourself to a new outfit every week, etc.) count at the end of the month.
If you’re not careful and don’t keep track of your spending, you could end up paying for these indulgences and not having enough money to pay for big expenses, such as mortgage, rent, or loans.
Financial mistake #3: Not saving enough or at all
You should aim to save at least 10 percent of your income. However, most people don’t save anything. They live from paycheck to paycheck and believe that they can’t afford to save. The truth is that anyone can save, as long as they have a plan and stick to a budget.
If you plan on saving a certain amount per month, then put that money into your savings account or an envelope the moment you get your paycheck, or set up automatic deposits – this way, you won’t be tempted to dig into that amount and spend it frivolously, only to be left wondering where all your money has gone.
Start saving as much as you can – every step counts and saving a little is better than saving nothing.
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These financial mistakes are keeping you in debt
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