How To Avoid Being Buried In Consumer Debt
A lot of people in the country are living way beyond their means
. In most cases, people who constantly spend beyond their means gets buried under a pile of debts and become bankrupt. If you are one of those people who have been accumulating hundreds of dollars in consumer debts, it is time for you take a serious look at your situation.
What are consumer debts?
Consumers are debts that one accumulates by buying consumable goods. Consumer debts are non-investment expenditures and you cannot hope to recover any monetary profits from it. If you pile a huge amount of consumer debts, you will have to pay everything from it from your pockets. A good example of consumers debts are those that you accumulate in your credits cards when you go shopping or dining out.
Minimizing Consumer Debts
To help you minimize your consumer debts, you should learn to stick to your budget. At the beginning of the month, you need to list down all your fixed overhead cost such as your utilities, gas, rent, amortization, food, entertainment and others. On the other hand, you can also draw a list of things that you can have in case you have some budget surplus. Note that you need to reward yourself sometimes. However, make sure that you only give yourself a treat after all other expenses have been paid and you still have some money left.
Allocation a certain amount of money for your fixed overhead cost and make sure that you stay within your limits. If you must go beyond your limit, make sure that you do not beyond a few dollars of so. Always remember that when you go beyond your budget, you will need to take out money from somewhere to compensate for the shortfall. If you keep on having budget shortfalls every month, you will end up with a huge deficit at the end of the year. Such practice is not really good.
To stay close within your budget, try to keep tract of all your daily expenses. Keep a notebook where you record all your expenses for the day. You also need to compile all the bills that you receive and then record your bills religiously. You don't really have to be very good at doing accounting to do this. In fact, you can just list all your expense in one column and then add them together. It will not really take you more than a few minutes to do this thing. Besides, the benefits that you can derive out this simple activity are really great.
If you notice that you are spending too much money on something, try to find a way to cut back on your expenses. Note that if you really take a closer look at a given situation, you can always find a way to save some money. In fact, living a frugal lifestyle can be just as rewarding. Imagine being able to sleep well at night knowing your bills have all been paid and you still have a little money left in the bank. Try doing fun activities that don't cost much, like picnicking in the park!
by: James Copper
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