Being reduced from a job, high costs of medicine, a shopping habit – all these may be obvious reasons of debt. But there are still another hidden ways that lead people to financial disaster.
The other financial solutions that cause monetary problems are not so obvious. They can even be recommended as financial solutions to your problems. But instead of giving real help to your financial instability, they actually cause more problems.
For example, some people tend to rely on online payday loan providers in their everyday necessities. But yet, this service is only useful, when you face definite monetary problems, but not on regular basis. That is why all financial recommendations should be applied according to your personal situation.
Learn the next tricky financial options that can only increase your debts, and try to avoid them.
Leasing a Car
The problem: while leasing is a good way to get a car, you still may face definite problems demanding extra money.
Leasing a car most people don’t pay much attention to all conditions of the agreement. That is why they don’t know that they have to pay for extra mileage, for example. There are also another fees you might be unaware: disposition and acquisition fees, as well as early termination fee. To solve these problems some people choose to roll into another lease. But this just makes them dependent on regular vehicle spending.
The solution: think about leasing a car. Pay attention to all points in your agreement. Think about possible mileage that you are going to drive. Also take into consideration all extra fees. Eventually decide if leasing a car is really more appropriate for you that buying a used car, for example.
Getting a New Job
The problem: you may consider your new job as a possibility to solve your financial problems. But most people don’t take into consideration the next fact: with the growth of your income, your spending is also growing.
New financial possibilities that a new job gives you can really befuddle you. You tend to buy a new car or simply spend more money on shopping. And this is a known trap.
The solution: you should continue keeping the same lifestyle as before. Use extra money for saving on retirement, holidays or covering your previous debts. In such way you will definitely see the increased income and can budget your necessities more thoughtful.
The problem: you may be given an inheritance or win a lottery, etc. When people get such great amount of money unexpectedly, they are not ready to it and will just waste it.
Like with extra income from a new job, people have no plan for spending such big money. They have an idea that this money is endless and they begin spending it thoughtless. The real problems begin, when after expensive purchases people just can’t stop and eventually get into debts.
The solution: there is a rule of one-third. It teaches you to divide money on three parts and use it in the next way: one third for taxes and other payments, the second third for savings. The left third can used on shopping and other kind of spending.
Most financial problems that people have are caused by their thoughtless and unrealistic approach to agreements and financial obligations. So try to be attentive with each document that you sing up. Moreover, you should always have a plan and budget your finance. Such responsible attitude to money will make your finance stable and independent.