You’re trying your hardest to get out of debt, but every time you check there is always that minus figure. The truth is you’re not going to get out of debt by simply checking your accounts. There are other factors in play and you need to change them if you really want to get out of debt for life. Here are some of the reasons you’re still in debt.
You’ve Not Got an Emergency Fund
You need a savings account that is purely for emergencies. You don’t have to put a lot away, but you want to build an egg that covers around six months of your income where possible. If you don’t have the emergency fund, you’re going to use overdrafts and credit cards to pay for problems when they arise.
Your Credit Cards Have High Interest Rates
When you got your credit cards, you had to accept the high interest rates. However, now that you’re fixing your credit rating, did you know that you could get lower rates of interest?
It could be worth a shot at contacting your credit card providers and finding out whether they can reduce the rate that you pay. Just a few percent will soon see a drop in the extra amount you pay so it remains in your pocket.
You’re Not Clearing the Credit Cards
So, it’s not always possible to clear that debt you’ve built up in one go, but you need to pay more than the minimum balance where possible. Start off slow.
Pay the minimum balance on other cards and then extra on just one of them. Clear that one and then move onto the next. As you pay more, the amount of interest you pay will decrease and you end up with more money in your pocket.
You’re Spending More Than You Earn
You have to give in when you see those shoes on sale or when the grocery store has a special offer. You know that it will eat into your savings or you need to use your credit card but you just can’t deny yourself. The problem is you end up spending more than you actually earn. It’s a really easy trap to fall into, but one that you really need to watch out for.
There’s No Family Budget
The best way to not overspend is by creating a family budget and sticking to it. You need to know how much is going out and what’s coming in.
This will give you an idea of your disposable income, so you can spend that on everything that you really need. Make sure everyone in the home stays within that family budget.
People Around You Don’t Help
It’s difficult when you’re surrounded by people who keep spending money. It could be friends who don’t understand your financial constraints or children spending more than your budget allows.
You need to surround yourself with people who will help you stay on track, and explain to them that you have a budget you must stick to.