In order to function properly, the family budget must remain unchanged. Once you find a product that sparks your interest, you cannot see the pitfalls that you can take to get the money to cover this extra expense. The fact that you have other credits or credit cards cannot encourage you.
There is a chance that you may make mistakes when making your purchases. The appeal that financial experts make is to act with caution, with prudence, and to make your purchases carefully and rationally.
Errors when purchasing with your credit
Denying reality. It’s not appropriate to use phrases like, “I deserve it.” If you see something you really want but it’s expensive, you immediately start thinking, “If I just stop paying for these things, I can afford it,” or “I try so hard, I deserve to have this.” Instead of convincing yourself that it’s better to buy the newly discovered expensive product, you should fight to let go of that idea.
It is said that spending is different depending on the origin of the money. In fact, rationalizing spending should start with careful use of resources; waste should be avoided at all times.
Rational spending. An expensive purchase is justified by the amortization of its cost. But this long period of time to pay off the debt cannot allow one to ignore the fact that one made an irrational purchase, so as not to fall into those acts of weakness again.
Satisfaction of needs. Your purchases should not be subject to compromises, but rather to the satisfaction of your fundamental needs.
An iron attitude must be maintained. If you already have a budget that serves your best interests, you cannot disobey it. Nor can you resort to blackmail to change what has been planned.
A credit is misused when situations such as the following occur:
– When applying for a loan, you must have a plan of what you will do with those funds.
– You cannot use credit to make purchases that you would pay for in cash (food, clothes, shoes).
– It is not appropriate to ask for a loan to pay for another.
– It is not appropriate for you to allocate more than 20% of your monthly income to pay debts.
The consequences of misusing credit
When you take on debt by paying with a card, you need to cover more than the minimum payments to avoid extending the principal payment term. Improper debt management can lead to higher financing costs.
The stresses of debt can lead to health or emotional problems, and bad credit can build up. Taking control of your credit requires prioritizing, being consistent, and having a game plan. You also need to be in the right frame of mind when making financial decisions.