When the amount of your bills is greater than your income, it’s safe to say…you’re in trouble! The very simple concept of having more money going out than you have money coming in doesn’t take much to figure out. It’s when you find yourself in situations like this that you’ll only keep adding to your debt whenever you spend more money than you make.
The moment you realize that you’re whipping out the credit card to pay for that cup of coffee….or two….or three (throughout the day) with that bagel or egg sandwich, or grab a bite to eat for lunch every day at the nearby restaurant or deli, or order take out for dinner every night (or almost every night), or…heck, you don’t have the cash on you right now so you’ll just pay for it when you get the bill next month! That’s when the first thing you need to do is get your spending under control.
“You can’t be in debt and win. It doesn’t work.”
– Dave Ramsey
It’s those frequent, everyday small purchases which cause you to “nickel and dime” yourself into that never ending cycle of debt. You not only need to get your spending under control, but you also have to avoid unnecessary debt! Don’t let those small purchases add up until you realize at the end of the month you can’t pay it all back. If you don’t have the cash to pay for it, then you shouldn’t be buying it and you probably don’t need it. And if it’s something you do need, then you need to re-assess your budget or come up with a plan to save up for it!
Under normal circumstances, the only time you should be purchasing anything with credit cards is if you have the funds available to pay for it and its use is strictly out of convenience. Use it as a tool, but not as a means to support a lifestyle you can’t afford. You’ll never reach financial freedom by continually getting yourself into debt that could be and should be avoided. Take control, stick to a budget and watch how your financial circumstances will change for the better!
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