If you feel like you’re stuck in payday loan debt, there may be some money habits that are part of the problem. Habits are hard to break, but bad money habits can impact your financial future for years. They can leave you turning to payday loans to cover the bills over and over again. They can also cause you to sabotage any progress you make.
The first step to breaking bad money habits is being aware of them in the first place. So, we’re sharing what those habits are and how to break bad spending habits. If you’re ready to kick these bad money habits to the curb and make big change with your debt, read our post “How to Pay Off Debt Without Increasing Your Income” for more helpful tips on how to cut back on spending.
That TV you spent several hundred dollars to buy on Black Friday just because it was a great deal, probably wasn’t a great idea. Neither was the extra $40 you spent on holiday decorations at Target in the $1 bin section. Impulse buying is a hard habit to break.
When you don’t make a list before heading to the store, it’s easy to fall into the habit of buying without thinking. You end up making unplanned purchases on everything from food to clothes to going to the movies to even more expensive purchases, like cars. And unplanned purchases always cost more than expected.
Impulse buying, while at the time may seem trivial, can wreak havoc on your finances. It can not only cause you to stay stuck in payday loan debt, but may also be the reason why you turned to payday loans in the first place.
Spending Without a Budget
A budget is simply a plan for your money. It lists all of your expenses, how much each costs, and shows you how much extra money is leftover after those expenses have been paid. Creating a budget isn’t difficult and using one can make a huge difference in your finances. It can also help you get on track to get out of debt.
Tracking your expenses through budgeting allows you to intentionally plan for how much money you’ll be paying towards your debts each month. Without a budget, you end up overspending. It’s easy to purchase that outfit or go out to eat again when you’re not aware of how much you’ve already spent. Using a budget to get out of debt may require that you learn how to cut back on spending. That may mean spending less money eating out or cutting out certain expenses altogether.
If you’re new to budgeting and don’t know where to start, check out our list of the Best Online Budgeting Tools to Get Out of Debt.
If you find yourself spending more time in the drive-thru line than in the grocery store, you’re probably spending too much money eating out. We get it. It’s the easy option after a long day at work when you don’t have the time or the energy to make dinner. But it’s also the more expensive option, and can lead to spending hundreds of dollars more than you need to on food every month.
Eating out, or picking up a pizza on the way home, can become an expensive habit. For most families, you can spend a fraction of what you spend eating out to cook dinner at home. Breaking this habit means that you’re going to have to plan ahead, though. Make a list. Go to the grocery store. And if you’re too busy during the week, meal prep on the weekends. You’ll be surprised at just how much money you will save by cutting out restaurant and fast food spending.
It can be easier to put off the hard things than to actually do them. So, we procrastinate. We put things off until the very last second. For some chronic procrastinators, they work better under pressure, but for others, they end up not doing the thing altogether, which can, surprisingly, lead to mountains of payday loan debt.
Being in payday loan debt can become your new normal, and as difficult as it is to get out of debt, it can feel far easier to stay in it. So, you procrastinate. You put off paying off your loans or reaching out to a payday loan consolidation company. And you fall further into the payday loan trap.
Soon enough, the payments become overwhelming, though, and procrastination no longer cuts it. So, breaking this bad money habit early on is one of the most helpful things you can do for your financial future.
Most people take out their first payday loan to help cover an unexpected expense or financial emergency – car needs repairs, refrigerator breaks, hospital bills have to be paid. Not having extra money saved to help cover those expenses is the fastest way to get and stay stuck in the payday loan trap.
Unexpected financial emergencies happen. You can’t predict when, but you can predict with certainty that they will. So, not having an emergency fund is willingly setting yourself up for money troubles when the financial emergencies do happen.
If you’re ready to learn how to break bad spending habits, start here. Start by learning to save and create an emergency fund for yourself. If you’re ready to get started, check out our list of 10 Surprising Ways to Save $1,000 in January.
Spending More Than You Earn
Perhaps one of the most common money habits that keeps people stuck in debt is spending more than they earn. If you’re spending more money than you make, that means you’re using debt to fund some of that spending. And if this is a constant habit, chances are you’re pretty deep in debt.
Spending more than you make is a guaranteed way to remain in debt. It’s a hard habit to break. It takes a commitment to learning how to break bad spending habits. It may also mean creating a budget, cutting out impulse purchases, and not eating out as much.
If you’re ready to get out of payday loan debt, start here. Breaking this habit will have the greatest immediate impact on your finances.
If you’re stuck in payday loan debt and are ready to make a change, contact us today. Our team specializes in payday loan consolidation. We can combine your multiple monthly payments into one, easy-to-manage monthly payment. Getting out of payday loan debt is just one phone call away.
Want to Know More?
Get out of debt with our list of 50 Ways to Get Out of Payday Loan Debt