Having bad spending habits can make you go into debt very quickly. The first and most important thing you need to do to tackle debt is create a budget. Write down your monthly income. Then, write every expenditure you’ve made in the last month. Put the most important expenses at the top of the list such as utilities, credit card bills, gas, and mortgage/rent. At the bottom of the list, write anything that’s extra. Add up all the expenses. If you’re spending more money than you make, you will need to take some of the unnecessary items off the list. Also, set aside an amount of money to put into savings.
Identify items or services you bought that you don’t need. Take these items off your list and put the money you would have used into your savings for the important big-ticket purchases you’d like to make. For example, if you buy a $3 cup of coffee every morning, try making coffee at home instead. Small amounts will begin to add up faster than you think.
Overuse of credit cards is the number one reason people go into debt. Instead of using a credit card, use a Visa prepaid credit card. With a regular credit card, you pay interest on every purchase when you don’t keep the balance paid. Because you’re buying on credit, it’s very easy to spend more money than you have. When people use credit cards, they feel like they aren’t spending real money, so they lose control easily. With a prepaid card, you decide how much money you want to put on the card, and then you can’t go over the amount you deposit. You also avoid interest charges with a prepaid card.