Often than not, you keep wondering where your money simply disappear very soon after payday. Most people do not realize how quickly their money is spent as soon as they get those monthly paychecks. There are 2 key reasons contributing to this notorious phenomenon, impulse buying and ignoring that small change does add up.
Impulse buying essentially means that you buy things which you do not really need and may not even use them. And often times, impulse buying items are big ticketed items too. But psychologically these things are mere comfort food your subconscious desire to own. You end up overspending on non necessities, and often on credit too. This pose a great problem to credit repair since your objective in credit repair is to ensure that you save as much money to repay your debts and pay down your outstanding credit balance, Not incurring more credit and debt.
!b>The Sin Of Indulging In Impulse Buying.
A lot of us indulge in impulse buying. You intended to spend the afternoon window shopping. You then saw that latest branded design from the French designer which you have been reading raving reviews about. And of course, you must have it. That afternoon, you spent USD2500 for a designer, branded, handbag on credit.
Small Change Does Add Up.
Always remember that wastage and small change do add up to a good amount. You have a few 10s of dollars in your wallet and drinks over dinner would have had it spent. Or you pop by the grocery store to pick up some milk and bread, saw those enticingly mouth watering chocolate bars and had to buy them too. Well the problem is that small change do compound. And what about your 4 coffees a day routine, that daily newspaper which you seldom read anyway, and fruits you bought 2 weeks ago which you are often than not, too lazy to eat.
How To Manage Your Credit and Money.
For an entire month, keep a little notebook to record your daily spending, be it a cup of coffee, tips for the waitress in that Chinese restaurant, or that new micro home system you bought. Include all basic necessity spending which are fixed such as your phone and utility bills, as well as all ad hoc expenditures. Do not miss out any item. This is a simple money tracking system which allows you to understand where you spend your money and subsequently correct some bad money spending habits.
Review each item in your spending list throughout the month. You now have a much better picture on areas which you could cut spending without even you noticing any pain. Take for instance, cut those newspaper and magazine subscriptions and read them online.
Or it is probably time to cut that 4 coffees a day bad habit. And if you now regret spending USD2500 for that designer handbag which is still lying in that closet unused, you might consider selling it to that second hand shop to generate some income.
Life would go one without Cable TV, especially when there are tons of internet tv available nowadays.
Essentially, the trick is to learn to remove one pleasure at a time. Sacrificing one or two pleasures for the moment is worth the while if you can trade it for a much better credit score for a better long term.
Keep up the good habit of tracking your spending until you are able to manage your money well. Impulse buying poses one of the greatest challenges to credit repair as it could spiral out of control if you lack discipline. Getting rid of this bad habit is one of the critical step toward a good credit score and a clean credit report.
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Joey Lee is a CFP and MBA with 17 years of banking, financial, business & marketing experience and a Platinum Ezine Author. Learn authentic Credit Repair skills and comprehensive information on Credit Repair Tips, credit reports, credit scores at CreditRepairSkills.org
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