Avoid These Mistakes to Get Out of Debt

In today’s world of online spending, it’s easy to get in debt and harder to get out of it. According to one study, about 60 percent of people with credit card debt say they have been in debt for at least a year. From pricey meals to shopping sprees, we often don’t realize how much money we’re throwing away until it’s too late. Debt can quickly pile up, and before you know it, you’re drowning in it.

If you’re struggling to get out of debt, it’s essential to identify your spending mistakes and commit to eliminating them. Below are some of the most common spending mistakes people make and how to avoid them.

1. Not Tracking Your Spending

One of the biggest mistakes people make is not tracking their spending. Many people have little idea where their money goes each month. It’s essential to record all your expenses to know where you can cut down. A few tips to get you started:

  • There are many apps and tools to help you track your spending.
  • One great option is to use a budget planner to list all your expenses.
  • It’s essential to stick to your budget and make adjustments as needed.
  • You can also automate your budget so it stays updated automatically.

2. Not Keeping an Emergency Fund

Another common mistake is not having an emergency fund. Emergencies happen, and without a backup fund, you could end up using your credit card to pay for unexpected expenses. It’s a good idea to have at least six months of living expenses in your emergency fund.

If you don’t have an emergency fund, start by setting small goals and automatize a certain portion of your paycheck to your emergency fund. Building an emergency fund takes time, but it’s critical to have one.

3. Using Credit Cards Instead of Prepaid Debit Cards to Pay for Things

Credit cards can be beneficial – but they can come with unexpected risks. One of the biggest mistakes people make is using credit cards to pay for everything. If this is an issue with you, a prepaid debit card can be a convenient and accessible way to get out of the overspending cycle and start working your way out of debt.

When you carry a balance on your credit card, you pay interest every month, which can add up quickly. If you have a balance on your credit card, make it your priority to pay it off as soon as possible to avoid accruing interest.

4. Ignoring your Bills

Ignoring your bills is a huge mistake that can result in late fees or even a reduction in your credit score. It’s essential to prioritize paying your bills on time to avow these issues. If you’re having trouble paying bills or managing your debt, consider talking to a financial advisor or debt counselor.

Sometimes you have the cash but life gets in the way, leading to late payments. Electronic bill payment is a convenient service that lets people get all their monthly bills paid in one location, and on time. There is a long list of participating companies that allow you to do this at Currency Exchange locations. Just a few categories include:

  • Cell phones
  • Mortgages
  • Gas companies
  • Credit cards
  • Cable bills

To get started, simply bring in cash or debit, as well as a bill stub or account number. Someone will take your information, process it, and ensure that the correct information is uploaded to the system so that future bills will be paid on time. This system also allows you to get bills paid at off times when necessary. You’ll be in and out in minutes – with the peace of mind that lets you get back to what’s important in life.

5. Compulsively Shopping for Things You Don’t Need

Spending can be a compulsion that becomes difficult to control. If you feel an irresistible urge to buy unnecessary items – even while going further into debt – then it is important to seek help and get your spending habit under control. This bad habit just adds to people’s money-related stress and complicates other problems in life.

If you’re unsure which side of the fence you’re on, here are some telltale signs you may have a problem:

  1. You often buy things you don’t need.
  2. Consumer debt is holding you down.
  3. Over-limit fees and other financial penalties are adding up.

Currency Exchange in Illinois and Throughout Midwest Can Help You Manage Your Finances

Getting out of debt is challenging, but it’s achievable with discipline and smart money management. By avoiding the most common spending mistakes, you can take control of your finances and get on the path to financial freedom. Remember to track your spending, build an emergency fund, spend responsibly, and prioritize paying your bills on time. Stick to your budget and make little changes over time to achieve significant results!

In addition, Currency Exchanges throughout Illinois provide a broad range of services to help folks manage their finances, cash checks and get their bills paid on time.

Contact Community Currency Exchange (CCEA) to check out the many financial and auto services that support smart spending. Best of all, we provide all our quick and convenient services under one roof. Stop by your nearest location to find out what we can do for you today!

A person holding out their credit card.

With over 350 locations, many open nights, weekends, and holidays (and several stores with 24/7 availability), you can rest easy knowing your financial needs can be taken care of when you need them most. We’re in the heart of every community. Don’t believe us? See for yourself.