5 Awful Financial Practices You Need To Improve To Come Out Of Debt

Glance through these five poor financial practices that you need to improve and guard yourself against them in the future as well.


Are you in debt but have a strong urge to come out from it? Well, you have come to the right place - glance through the below-mentioned five poor financial practices that you need to improve and guard yourself against them in the future as well:

1. Avoid Excessive Use of Credit Cards

While credit cards are tempting as they give cash backs on purchases, reward points and so forth. However, if you use your credit cards every now and then just to avail those cash backs or reward points, eventually you might be paying off more in the form of interest and charges to the bank if you don’t pay back your credit card dues on time.

People who are disciplined, know how to use credit cards wisely, will actually use credit cards to their advantage without the risk of overspending; however, most of the people just fall in the trap that these credit cards have to offer because they lack the discipline to use these credit cards prudently. If you have high bill to pay, don’t let it be. Arrange finance from somewhere or take a loan against your car or any other valuable things and pay the bill immediately, otherwise the interest will be increased day by day.

2. You Owe the Balance & Not Just the Minimum Payable Amount

Minimum payments are often calculated around 5% of your balance and if you’re just paying up the minimum amount mentioned on your credit card bill – it means you would not only stay in debt but also accumulate more interest.

So the next time when you open your credit card bill, know that you own the balance and not just the minimum amount payable.

3. Avoid Hasty Buying Decisions

People who end up buying things on a whim often remain in debt. They will buy the products whether they are on sale or not and even if the purchase was planned or not. Nevertheless, hasty or unplanned buying decisions can lead to a series of unsafe spending behaviours including:

  • Excessive use of credit card which may incur more debt
  • Justifying the unwanted purchase
  • Losing sight of the budget

Buying hastily occasionally may not leave a lasting impression on your finances; however, it can affect your goals if this becomes a habit. Hence, it is imperative to develop a plan that helps you to deal with that urge to spend without forethought.

Surely, the easiest plan that anyone should have in place is - “Asking oneself whether I really want to buy the particular thing in question or is it all right to remain without it (means it won’t make any difference if you don’t buy it because it’s not essential)”.

4. Avoid Taking Interest-Free Loans

Stores offering interest-free loans are just enticing probable debtors and alluring them to spend more. The problem is many people who fall for such offers won’t end up paying their loans within the interest-free period and after that period they are often slammed with charges along with retroactive interest beginning from the so-called interest-free period.

It is imperative to read the fine print. Unless you’re sure you can pay it off within the grace period, interest-free loans are merely a trap that will incur you with additional debt.

5. Refrain from Shopping to Remain Cheerful

Many people out there go shopping, just to lift their moods and to remain cheerful. Well, shopping activity can actually release endorphins in the brain just like other activities like exercise. Regrettably, unlike the other activities, spending money to feel good can soon become a habit, which can be tough to break. 

Therefore, before making your purchase, think if you really need to buy or you’re buying just to lift your mood high. Shopping habit is real and can be hard to break; however, a health professional can work with you, identify your overspending habit, assist you to overcome it and help you to remain debt-free.

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The Bottom Line

If you want to remain debt-free, you need to have full control over desires and habits, which is broken down into two important pieces:

  • Discipline yourself when it comes to spending. Avoid buying things that you don’t require or isn’t important in the first place. Avoid impulsive buying habit.
  • Refrain from competing with your friend, neighbour or colleague with regards to imitating their lifestyle or material they possess.

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