With bankruptcy plaguing the country, it is only necessary to know how one can stay clear of it. One of the biggest causes of bankruptcy in recent times is over spending, which leads to building up of loans and credit, eventually becoming a burden too heavy to carry. Listed below are smart ways in which you can avoid making a mess out of your finances.
Borrow Only What You Can Repay
For every dollar you borrow, make sure you have the capability of paying it back on time. Most of the times, creditors will make sure of that before lending funds to you; however, you as a borrower have the ultimate responsibility of making sure you honor your commitment. Draft out a plan so that you know what and how much you can repay.
Make it a habit to save money regularly. Set up a deposit account with little or no charges and transfer a certain sum of amount into the account each time you get paid. The money you save can pay for unexpected expenditures, or a vacation later.
Review and Pay Existing Bills on Time
Make an effort to pay all current credit card and utility bills on time. You can opt for the direct debit facility offered by your bank that makes regular payments against your account on your behalf. This way, at the end of the month, you will have only a nominal amount to pay or maybe none at all.
Take charge of your finances by reviewing your bills, bank accounts, and credit card activity statements on a monthly basis. This will not only help to investigate any erroneous or doubtful transactions, but will also bring to your notice any bills that you may have not paid.
Keep a Track on Your Credit Cards
These credit cards can prove to be fatal for your finances if not monitored properly. If you have more than one credit card, it is wise to only carry one with you. This not only saves you from unnecessary expenditure but also prevents credit card frauds in case your card or wallet is lost or stolen.
Close down any unused credit cards that you have in your possession – this will help you will smartly evade charges and fees on your dormant cards, not to mention curb the urge to overspend and use up additional credit.
Review Your Credit Report
At least once a year, make sure you review your credit report – always do it before you apply for further credit. The benefits of doing so are two-folds; firstly it will give you a clear picture of where you stand on your credit rating, and secondly, you can spot and fix any errors in the report that may affect your report adversely.
Still, if you are having trouble managing your finances, contact a credit counselor like GTA credit as soon as possible and allow them to help you.