Exhibiting poor money habits is ubiquitous in today's culture, and the proof is in the proverbial pudding; that is, in the numbers.
Much the same way we look at obesity and overweight statistics in the population, we have to also stop to weight the reality that less than half of Americans have a savings account, and instead live paycheck to paycheck. That is a slippery slope with many deleterious downstream consequences.
The biggest problem that leads to bad money habits is not knowing where your money is going, relative to expenses versus income. Budgeting has to be a staple, and that can’t mean writing down expenses and subtracting simply from your income and hoping for the best. You have to get down into the weeds and really take a look at the extra expenses, too, such as buying cigarettes or paying for food out to eat at a restaurant. Those expenses, far too often, are forgotten. Those fixed expenses also must be exact, not written and used as gospel when you’re estimating. You have to get it down to the last red cent.
From expenses to debt, you must really take a long hard look at how much you have and a way to fix it. Fixing credit isn’t quite as easy as it sounds, so you want to focus on the highest interest rates, highest balances and if those same balances are close to the actual credit limit. If you’re the type who ignores the overall balances or total amount owed, and instead just make minimum monthly payments, while that is better than missing payments or doing nothing at all, you’re going to be in debt for decades given interest rates being in the double digits.
You can’t be afraid to take drastic measures, either as far as debt goes. Credit consolidation companies help you quite significantly and they’ll not count too harshly against your current credit score. That means when you find a company that can work as the middle man and get your credit down to one monthly payment, that move would be highly advisable.
The real concern is not so much how to stop bad money decisions but how do to a complete turnaround and make it last. Much like dieting, you can’t just change your ways for a few months and then revert back to the same old bad choices, money wise.
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