If you are in financial trouble and not sure what to do about it, probably the best thing to do is to go back and find out where the bad habits came from in the first place. If you want to get out of debt then you first have to look at how you got there so that you can stop doing the things that might land you into trouble. Below, are ten of the most common bad habits that land people in trouble with their money.

1. Balance Transfers

Credit card balance transfers are meant to be used to shift money from a card with high interest rates, to one that has lower rates or zero interest for a certain period of time. The problem with balance transfers is that instead of paying off what they owe, people then start racking up more debt on two cards. If this is you then cut the cards up and stop spending at once.

2. Not Budgeting

The fact is that most of us only have a limited amount of money each month and have to allow for essentials such as rent or mortgage, food and clothing first. If you decide to spend everything that you have left over then you will soon find yourself in trouble. When you are in debt, any money that is not needed for essential bills and living costs should go towards paying off your debts. If you don’t have much money left over at the end of the month then you will either need to make some cutbacks or take on an extra part time job to get yourself out of trouble.
 

3-5

People don’t bother checking their credit reports, which could be wrong, not checking this from time to time will lead to trouble. You should notify your creditors as soon as you realise you are having problems meeting your commitments, failure to do so will lead to more trouble. If you use store cards to get a discount, stop, the APR are on a store card is prohibitive.

6-8

If you keep putting off creating an emergency fund you should start one now, everyone needs emergency funds no matter what their general financial position, if you don’t have a routine and order in which you pay your bills then you are likely to miss payment dates and incur extra charges. Work out a payment schedule for all of your bills. Don’t use your credit card to buy something when you can use your debit card instead, a credit card is not free money.

9-10

Whatever you do, stop making card payments late, if you have a payment schedule payments will be on time and you will avoid charges. Always make more than the minimum payment on your credit card if you don’t want the bill to go up instead of down.

If you break the bad habits and use the alternatives you should soon be out of trouble.