Once upon a time there was a girl who’s spending habits were out of control. She was a shopaholic and much like all shopaholics she loved to go shopping (duh!). Her two credit cards were maxed out and she struggled to not only pay the regular bills but to also repay her consumer debt. If you haven’t already guessed, that girl was ME!
As a shopaholic I was a little bit out of control and I was in denial. Looking back I can admit that I really struggled to control my spending habits. As a college student I worked a part time job and was barely making minimum wage.
I want to serve as a warning of the things that you should never go into debt for. Getting into debt can cause unnecessary stress and can really affect your future in a negative way. Not to mention if you do not pay your bills on time your credit rating will take a hit.
Going on vacation can be so much fun and a change of scenery is refreshing. But you know what will leave you feeling down in the dumps? Coming back home from your vacation to bloated credit cards and debt repayments! -Who wants that?!
Vacations should be stress free and full of great memories. Debt does not fit into that happy equation at all so if you want to go on vacation just save up and pay for it in full so that you do not have to stress and worry about it later.
I can not think of ANY vacation out there that is worth going into debt for! Not a single one. Nope.
I was listening to Dave Ramsey and I have to agree 100% with him whenever he tells people to NEVER cosign any loans for anybody (yup not even family). Cosigning a loan is a very bad idea. Why? Well, if the person you cosigned the loan for defaults on their loan or is unable to make payments you will be on the hook to pay! Unable to make payments on the loans you cosigned for can leave you with unnecessary stress and any missed payments will ruin your credit.
Shoes, clothes & accessories
My past credit card debt came about because of my shopaholic habits. I used to shop at sales and impulse purchases at the mall were my weakness. All I had to do was swipe my card and take my bag of loot home with me! Christmas came around almost every month for me.
If you are using credit cards to buy clothes with money you do not have,- you need to stop right now! Paying interest on clothes, shoes and accessories that have a bad resale value is not a good idea. Do not waste money on trendy things that just go out of style, you are just better off saving or investing your money.
It’s not that uncommon for people to still be paying off the debt from their wedding by the time they get divorced! If that’s not sad, then I don’t know what is.
Finances are one of the top reasons most marriages end so it only makes sense to say that going into debt just to get married will likely add unnecessary stress to any marriage. It is possible to have a beautiful and memorable wedding on a budget (without going into debt). Instead of going into debt for the wedding ceremony why not save your money for a nice home so that you can start your lives as newlyweds instead!
In the end remember it’s the actual marriage that comes after that really counts not a one day ceremony!
Buying furniture, all new appliances, doing home renovations and overall upgrading your home can really set you back financially. If you can’t afford to pay for everything with the money that you have saved, you will get yourself into debt.
Going into consumer debt just to furnish your home with brand new furniture and other home decor is not the best idea if you want peace of mind. Your home might end up looking like a page straight out of a home decor magazine but the stress of paying off the debt that you got into is just not worth it.
It’s great to get the people you care about gifts but not if you have to go into the negative in order to do it. You can make your own gifts or find high quality and affordable gifts. It’s the thought that really means something and if you are buying gifts for people who truly care about you they will see that too.
There’s no phone, computer, video game or new flashy gadget that are worth getting yourself into debt. Sometimes you can get into credit card debt just so you can be the one in your circle of friends to say you got something first. So what if you got the latest iPhone first?! It does not matter. After a while (and once the hype goes down) the only thing you will have is a depreciating gadget, credit card debt and interest charges.
Once you drive a brand new car off the lot its value drops dramatically. Making car payments is not something that will do much for your financial future. You are better off buying a quality used car (some used cars are barely driven and some even look and feel brand new!). NEVER cosign a car loan for anybody! You’ve been warned.
Food brings people together and I LOVE to eat great food! I am not against dining out at nice restaurants but only if done in moderation. If you find yourself swiping your credit card every time you go out (and you are not paying the full balance right away) take a good look at how much money you are spending. Going out is one of those sneaky ways that can really add to the amount you owe on your credit card.
If you find yourself going into debt because of your regular monthly bills such as rent, phone, water bill, electricity etc. then chances are you might be living above your means. Living in an expensive apartment or home can set you back financially and is not worth the stress. Consider downsizing into a simpler place and living within your means.
That’s all for now. My hope is that you are able to take action so that you can avoid going into debt. It is very important to be aware of your own bad financial habits. Bad debt (ahem…consumer debt) can and will negatively affect your future and also rob you of your dreams if you are not careful. Owing money and not being very sure how you are going to pay it all back can be very stressful time. Budgeting and living withing your means is very important (regardless of how much money you make). You must tell your money where to go if you want to really be financially secure in life and the best time to start is today!