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Is it safe to say that nobody in the world, at least those that have gone to college or have started work, has not yet experienced having a credit card debt or being in debt? Or anybody that’s ever had a credit card has experienced late payments which resulted in penalty fees and interest charges – which ended up in debt.
What is causing consumer s to fall into debt?
Almost everyone, if not everyone, has spending problems. Some hardly notice that they’re accumulating debt or are just ignoring the fact, until collections start calling – to collect and/or to sue.
Whether or not creditors/collectors call, consumers should be mindful of those small spending that they make because they those tend to add up and create trouble. The first order of business is to find where the money is going and if it’s going to waste – so it can be plugged and the saving can start.
That small amount that’s saved from the simple identification of financial leaks can give the consumers unexpected savings – that is after those leaks have been sealed. This practice can help the consumer break the nasty cycle of living from paycheck to paycheck and can kick start a savings plan.
The following may not be an accurate and expert advice on what the common ways consumer’s waste money, but they are general and common enough for people to identify with:
When consumers don’t pay in full and carry a balance. Imagine wasting $180 on a $1,000 balance because the account has an 18% interest rate. The first or second time a consumer does this; it might not hurt, but if it becomes a habit, then expect the worst. How much money would the interest rate accrue on partially paid accounts in a year? So, consumers must make it a point to fully pay off the
balance each month.
Not minding how much is spent for gas and oil for vehicles. If the car runs fine on a regular, then why spend on premium fuel? Setting a budget and keeping tabs of how much is spend on oil and gas can help the consumer save a lot. Another way to save is to make sure that the vehicle is in tip-top condition.
Make a routine check-up of the tires. Tires in a good condition would give a more accurate gas mileage. Car manufacturers usually provide information on what’s the best time to do routine car maintenance in their manual.
Frequent changing or updating of gadgets to the latest just to be “in”. There’s a fierce competition among computer manufacturers now than before when it comes to market share. How models and features change over-time, hooking the consumers to chase after the latest innovation. How many people do we know – are more into how a gadget would make them look – than how a gadget serves the
User’s basic needs?
One of those gadgets that change models very frequently is the cell phone. Some manufacturers come up with a new model, not once a year, but twice! And then some consumers patronize this trend and end up wasting money. The cell phone, over time, has become a status symbol. Not only do many consumers spend for the phone model but also the plan that’s attached to it. Some consumers, just to get the phone, subscribe to a phone plan with features they hardly use, but pay for. Consumers who wish to save should avoid this kind of waste.
Choose a generic named product if it can do the job of the branded product. Why pay for a name when all you really can afford is the product itself? Branded products are just for people who can afford them – otherwise, if it works that should be enough. Don’t fall victim to creative packaging and clever advertisements and know that most generic products (especially prescription drugs) are as quality as the branded ones.
Don’t be shy to ask for discounts or promos. This is especially true with credit with credit cards. You never know which creditors offer a better a deal than what’s known or advertised. In stores, watch out for the seasonal or perishable items, because if they are near the expiration date they usually go out on sale.
Shop or buy in bulk rather than one at a time – unless it’s what you need. Did you know that you pay for individual wraps or packaging each time you buy an item? That’s the reason why it’s not practical to buy your everyday needs one by one or in small amounts – unless the item is perishable, like milk and bread.
Get rid of vices. Drugs, smoke and alcohol are the primary vices that consumers who wish to build up a savings must let go of. In the case of smoking, more than the cost of the cigarettes is their cost on health – of the smoker, the people that inhale (second-hand smoke) and also the environment.
Get rid of unnecessary and impractical habits. Shopping is one. Going to spas, salons, and spas are two. If the consumer has very pale skin, tanning is three. And number three has a 10% tax on top of it. Not only that, it also causes a serious damage to the skin in the long run. Those artificial tanning machines have been known to cause skin cancer.
