There are many Americans whose financial situation is not stable enough, even though some of the households get a considerable amount of income every month. The biggest problem that is affecting many people is spending.
Spending has led to a debt situation to the extent that some people have undergone a lot of psychological anguish trying to reverse the problem. There are several things you can do to rectify the problem, in case you find yourself in this situation.
Budgeting and Planning
This may sound obvious, but budgeting is often ignored, yet it is very important. You need to sit down and plan how you will be spending your income. This helps you to see clearly where most of your income is going to. When you budget, you become more self conscious about how you spend your money.
One of the things you need to do is to make a list. This prevents you from impulse buying. Try as much as possible to stick to the list and never deviate from it. If you see something you need, write it down at the back of the list and shop for it when you come back next time.
One way you can avoid impulse buying is to carry just as much as you need. This may also mean you should avoid credit cards. Take time before making any significant purchasing decisions, such as buying a car or expensive jewelry.
First of all you need to acknowledge that sometimes you spend money on things you do not need. This can help you to move to the next important step, which is to identify the triggers. Some surveys have shown that many people make the worst purchases at the mall. Identifying when you made such purchases in the past can help to create a work around that will help you to avoid the triggers that cause you to make these mistakes.
Offers and Deceptive Marketing
You need to watch out for free offers and misleading marketing messages. Even though offers and coupons are a way to save money on shopping, you need to pay attention to marketing messages that encourage you to buy more. For example, ‘buy one get one free’ type of offers are sometimes deceptive.
You also need to watch out for stores that encourage you to buy in bulk. Since some stores know that you want to save, they may make cost per unit price considerably higher, since they know some shoppers do not bother to check whether the price per unit is actually cheaper.
Credit cards are responsible for the biggest financial problems that many American households are facing now. The impulse buying that is promoted by the consumerism culture and the exorbitant interest rates have seen the average debt around $15,000 per household.
There are ways you can avoid getting into the credit card debt trap. Always avoid reward cards, since they charge a higher interest rate. Use credit cards when necessary. You should always pay the credit card balances every month. If you are already in debt, the sooner you start fixing the problem, the better.