Spending money can be a fun and easy thing to do but building up debt is even easier by just carrying a few credit cards. Here are the fastest ways to ruin your personal finance:
1. Don’t track your spending: Don’t care about the formula and the budget that income = expenses + savings. All you want is just to spend as you wish. without considering your limited income
2. Just pay the minimum amount for your credit cards: Credit cards give you extra spending power. Just charge and charge to your heart’s content. When you receive the money statements just pay the minimum sum or any other smaller amount depending on the fund available in your checking account. You are not bothered to make prompt payment and you let the bank charge late payment fees and interest on outstanding balances.
3. Credit card advances: You get cash advances against your cards and buy what you want or to meet your day-to-day expenses when you run out of cash.
4. Follow your neighbors: Your neighbor has just bought a new car. You are thinking that if he can afford it you can too. You go ahead and trade-in your old car which is less than three years old.
5. Skip your loan instalment payments: By now you are unable to make ends meet. You have reached your limit for all your credit cards
and you have no choice but to skip a few loan repayments.
Your spending pattern will not last long because your financial resources are limited and your debt is attracting more and more interest and it is no longer manageable. Very soon, financial institutions where you have obtained your credit cards and loans will file bankruptcy proceedings against you.
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