How You're Accidentally Building Debt

How You're Accidentally Building Debt

The Jason Hartman team talks a lot about ways we’re able to build wealth, but (especially as we approach the holiday season) financial hardships are on our minds. Unfortunately, many people are also accruing debt in ways they’re not even aware of. Even if you’re financially savvy and cautious, there may be things you can still do to maximize your income and prevent the rise of debt.

Aside from being on top of your main accounts to prevent things like overdraft fees, make sure you’re aware of all cards open under your name. Often, people will open cards specific to a store to gain discounts or other promotions. These lines of credit are often abused and forgotten about—but have very high interest rates. For store cards, it’s best to open them to gain the discount and then pay the balance off in full.

For other credit cards, make sure that you account for interest being accrued when you’re considering your balance. You may be able to transfer your balance to another company that offers a lower rate. Also, keep in mind that if you’ve ever used a credit card for a cash advance, this will be charged at an additional rate. Quickly, these fees build up. If you can avoid cash advances, do so. Otherwise, pay more than the minimum to prevent extra interest charges.

If you have unpaid bills, pay them as soon as possible. The late charges that are accumulating don’t seem to be significant, but over time they add up. You may find that they increase without your knowledge and soon enough, they’re quite high. To prevent this, set up automatic debit withdrawals every month. This way, your bills are always on time. You may also look into ways to reduce bills—shorter showers, cooler or warmer temperatures, and fewer lights may make an impact. Improving your insulation or consolidating your tv/internet or cell phone may also help change the amount you pay for basic services each month.

Even if you’re experiencing financial difficulty, avoid options like payday loans, which offer very high interest rates and provide an extremely temporary situation. If you’re unable to pay your bills, ask the institutions to which you owe money for a break. Very often, they’ll be able to offer a solution that keeps you out of collections and in the good graces of the business.

By being aware of each financial decision you make, you’ll sooner be able to quite wasting money. Before you know it, you’ll be investing the extra and turning a financial corner! (http://www.flickr.com/photos/infusionsoft/4707161008/)

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The Young Wealth Team

The Young Wealth Team

The Young Wealth Team

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