Getting out of debt is no simple task, no matter what people tell you. It takes hard work and commitment to good money management habits.
That much may be clear. What’s not so obvious are the habits you should make and break to reach your goal.
If you’re left wondering what to do, check out the guide below. Here are good credit habits that will help you manage your money like a pro.
Learn When to Get an Online Personal Line of Credit and When to Wait
It’s handy having an online personal line of credit available to you. It helps you take on big purchases and unexpected repairs, even if you don’t have the cash you need on hand.
But using it too often can get you into trouble.
This ties up your online personal line of credit limit and leaves you with less of you limit available. If you can’t pay off your balance in time, you won’t be able to tap into it when you need help covering an emergency expense.
If you aren’t sure when to get an online personal line of credit, remember this basic rule: only request help if it’s an unexpected emergency.
These products are designed to be a safety net when money is tight and you’re facing unavoidable and unanticipated emergency expenses. They aren’t meant to fund your next shopping trip.
If you have trouble resisting it, change the way you shop.
- Delete any saved financial information from your favorite online stores
- Remove any cards you keep in your wallet
- Wait at least 24 hours before you buy something — this gives you time to consider your purchase carefully and determine if it’s a need or a want
Pay Your Bills on Time
When you go to McDonald’s and ask for something from the secret menu, do you ask the cashier to add 10 percent onto your bill? Or how about when you go to fill up your tank, do you tell the attendant you want to pay for eight gallons of gas when you only need six?
No, of course not.
You don’t look for ways to spend more money than you have to, so why would you pay your bills late?
Many financial institutions, utility providers, and creditors will charge you when you’re late. Depending on your account, you may also accrue additional interest on what you owe for every day you’re late.
By paying things on time — or better yet, early — you can avoid these added fees. You may also be able to impact your credit history depending on your account.
If you’re finding it hard to pay your bills on time, figure out the reason why. Ask yourself the following two questions:
- Do you mix up dates and simply forget to send a payment? In that case, you may want to set up automatic payments with your bank.
- Is there something preventing you from paying on time? If you find yourself short come the big day, look to your budget to see if you can cut out other expenses to free up more cash for your bills.
Bottom Line
At the core of each of these tips is the need to change the way you manage money. Once you accept what you need to do, you’ll transform your finances, and you might even get out of debt.