I would venture to say that most people, if given the chance to choose between having credit card debt or not, would choose to not have credit card debt. No one really wants to pay interest or have debt collectors calling all the time. Why is it then, that so many of us end up struggling to pay off credit cards?
Of course, you could just be unlucky and have some unfortunate, catastrophic event happen to you. Most likely though, it wasn't one big thing; it was many little things that added up to what now equals a hefty credit card bill. You might not have even noticed it happening. A pair of shoes here. A trip to the grocery store. A medical bill. Slowly the bill just kept getting bigger and bigger until one day, you realized that you were thousands of dollars in credit card debt and you're left asking yourself, "What happened?"
So what DID happen? I'll tell you. You have fallen victim to the costly set of "Debt Mind Traps" that caused you to make bad financial decisions. The good news? Recognizing these psychological patterns, or what I'll call "Debt Mind Traps," will allow you to break free of the cycle of credit card debt.
Debt Mind Trap #1: You think you’ll have the money later to pay off your debts easily.
You’ve convinced yourself that someday soon you’ll have the money to pay for the stuff that you want now. Maybe you think you’ll be receiving a raise, a tax refund, a bonus, or any other cash windfall, or you’re just waiting for the next paycheck. Whatever it is, you figure that being broke is temporary, and that soon, you’ll be rolling in the dough.
Unless you’re Miss Cleo, you shouldn’t be predicting the future. Any number of things can conspire to come between you and your money. Instead of getting a raise, you may be given a pink slip. They may find an error in your taxes that causes you to owe money instead of getting money back. Anything could happen.
Even if you’re 100% certain that you’re going to receive the money, you should still exercise caution and wait until that money is sitting safely in your account. Why? First of all, unexpected expenses may pop up that will cut into your discretionary spending. You may have thought twice about buying those new shoes if you knew that you were going to have to spend $500 on a car repair. Second, by the time you’ve received the money, you’ve probably already thought of a million other ways to spend the money and the last thing you’ll want to spend it on is your credit card bill!
Follow the golden rule of finance - don't spend more then you have and you'll never end up in debt.
Debt Mind Trap #3
Debt Mind Trap #4
Debt Mind Trap #5
4 comments:
Very well put! As someone who has worked their way out of debt, I wish I had thought about this before needlessly spending. I hope your advice helps someone! :)
Great article. The "I think I deserve it" rationale has gotten me into an obscene amount of trouble over the past few years.
This is going to be a great series. I "digg" it!
I think everyone is guilty of this. And how often does that money never turn up??? More often than not, i'd say. For anyone in debt, this article on the 5 top debt solutions might be worth a read. I thought it was very helpful.
Hopefully there are people reading this series who will take the advice & never get in debt. Here's hopin...
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