If you don’t keep track of your expenses, debt has a way of sneaking up on you. Even loosing track of the small purchases you make every day can cause your debt to spiral out of control. Here are some tips to keep debt in check.
Keep Track of Your Expenses
One of the best ways to avoid the debt spiral is to keep track of your expenses. Charging things to your credit card without being mindful of how much you’re spending could leave you in shock when your credit card bill arrives.
Take a look at your past credit card statements and look for patterns of overspending. As you go through your statement, highlight expenses where you know you can cut back. Do you have a habit of eating out too often or buying a new pair of shoes each week? Start by bringing your own lunch to work or limiting yourself to only one pair of new shoes every other month. Once you’ve got a handle on your expenses, set a spending limit for yourself and don’t go over it. Only charge what you can afford to pay back each month.
Start an Emergency Fund
How do you pay for an unexpected, financial emergency? If you don’t have an emergency fund, you’ll more than likely have to use a credit card. Paying for large, unplanned expenses with a credit card can rack up debt in a hurry.
It’s a much smarter plan to have an emergency fund set aside for when the unexpected happens. That way when your car breaks down or your furnace needs to be replaced, you can use the money in your emergency fund rather than adding more credit card debt to your plate.
Learn How to Say No
When you’re standing in the toy aisle and your kid is begging you for that must-have toy, it’s easy to cave in—but think twice before you do. If you gave in and got your child every toy he ever asked for, you’d go broke in a hurry. Be more selective about the non-essentials you buy for your child.
If your kid is older, it’s a great opportunity to have a conversation about budgeting and money. When he asks for the latest, coolest video game, remind him you have to pay for football gear and an upcoming school trip. Tell him he can earn money by doing chores around the house and once he earns enough, he can buy the video game himself. He’ll learn he has to work for the things he wants to buy.
Consolidate Your Debt
If you’re already in debt, one way to help pay it off is by moving your balances from high-rate credit cards to one lower-rate credit card. Having one credit card payment can also make managing your finances a little bit easier.
Right now, you can earn double the rewards points on our Rewards Platinum Visa credit card when you make a balance transfer. You can redeem your rewards points for airline tickets, cash back, merchandise, gift cards and more. Visit our website for more details.
Don’t let debt sneak up on you. Keep track of your expenses, stick to a budget and you’ll be well on your way to a bright financial future—without debt!