Do You Have a Spending Problem?

If you took a snapshot of your bank accounts right now, what would it look like? Some people plan and save for the future while sticking to a budget. Others fly by the seat of their pants and don’t notice any issues until they get REALLY big. So, take a look at your situation and ask yourself, do you have a spending problem?

Credit Cards: A Love-Hate Relationship

Using credit cards is a great way to track your spending, earn loyalty points, and make one payment a month, that is, if you actually pay it in full each month. If you are maxing out your credit cards and can’t pay the balances off, you’re setting yourself up for massive long-term interest costs and a negative credit score. In fact, if you’re only able to make the minimum payments, it adds years and hundreds, if not thousands, of dollars in interest charges.

What’s the answer? Stop. Leave your credit cards at home, or better yet, cut them up. Set one aside for emergencies only, and start paying down that debt.

Late With Your Bills?

Take a hard look at your system for paying bills. Are you set up for regular payments online so you’re never late? Do you juggle payment dates waiting for deposits to hit? Are you seeing late fees hitting your statement each month? If you can’t pay your bills on time each month, you either have a spending problem, an income problem, or both. Late payments cost you big time in fees, higher interest rates, a lower credit limit, and a ding in your credit score.

Don’t panic. You can fix this by creating a budget that pays all your necessities first – rent or mortgage, food, utilities, car payments, insurance, etc. Use your bank’s online bill pay system to set up automatic payments to ensure bills are paid on time. Then it just takes discipline. Whatever is left over is how much you have to spend on clothes, entertainment, and the things you want but you don’t need.

Before You Borrow

If you find yourself borrowing from family members, friends, even your retirement account, that’s a giant red flag. Asking for money is awkward can totally destroy relationships. Is it worth it? Do you really want to be that person who’s always asking for money? And taking money out of your retirement account is a terrible idea. You need that money to be earning interest for the long-haul. Take it out, and you’re simply robbing from your future.

Have an honest conversation with the people around you. Tell them you’re not going to borrow money anymore and that you’re ready to be accountable. Ask them not to offer you money, and tell yourself it’s no longer an option. Focus on your budget, and investigate options to earn extra money instead.

Moving Forward

If you have a spending problem, you’re not alone. These issues start small and can creep up until you’re faced with something big. Just know that you can take control of your situation, and CashMax services are available to help.