Did you ever wish that you owned a time machine so that you could travel back to your past and rectify the bad money decisions which led you to debt? May be you could undo the graver ones which came with a precious price tag. Well, to be frank, there are lots of monetary habits which can push you deeper into the vicious cycle of debt. There are even some which attract you with the fake promise of ‘smart financial decisions’ and some others are definitely bad. So, would you like to avert the pitfalls and retain more of your cash? If yes, check out the few bad money habits which lead to financial disaster.
Habit #1: Automating your bill payments
Putting savings on autopilot, YES, but putting bills on autopilot, a big NO. You might think that you will never forget to pay off your bills on time if you set them on autopilot but there might arise a time when you forget to keep enough money in your account due to which you might be subject to penalties and overdraft fees. Remember that automatic bill payment is even more dangerous with those bills which are sporadically due. If someone’s already living on a financial edge and an unpredicted amount of money is withdrawn, that could seem to be the tipping point of his life. So, just set up alerts which can remind you about making payments on time.
Habit #2: Not having an emergency account
From a job loss to car repairs, there are surprise expenses always. If you still don’t have the money to cover them, you’re in for some trouble. Building an emergency fund offers vital crutch when all other things might go wrong. Make sure you save enough to have 3 months of living expenses. If you think you can’t go that much, you can even try to have few hundred dollars in your savings account as that can even work as a cushion for car repair costs and grocery bills.
Habit #3: Not following a budget
If you’re someone who still has the audacity of not following a budget, you should know that it will become tougher for you to save yourself from impending financial disasters. It is only when you follow a budget that you’re able to prevent yourself from falling further into debt and it also helps builds savings. It is more like a roadmap to accomplish your financial objectives.
Despite avoiding all the above mentioned financial errors, if you still fall in debt, you could watch out for the best unsecured personal loan rates from the multiple lenders in the market. Utilise the proceeds of the new loan to repay your debts and then focus on paying back the loan on time to avoid hitting your credit score.
