As the cost of living skyrockets, a significant number of us may find ourselves hard-pressed to sustain our living every month. This explains why there has been over-dependence on credit cards in recent times.
Unfortunately, credit cards come with steep interest rates and may push you into a vicious cycle of constant debt. This can be detrimental in your journey towards financial freedom and peace.
So, what are you supposed to do if you find yourself turning to a credit card more often?In this article, we discuss some of the simple things you can do to avoid credit card dependence.
1. Create a budget and stick to it
We know how hard it can be to create a budget and stick to it. However, developing a habit of budgeting is crucial to getting out of debt and away from depending on credit cards for survival.
Establish all your sources of income and determine the total cost of your expanses.From there, sit down and draft your monthly budget taking into account your overall income vs. expenses.
Make sure your budget is set within your means and be sure to set aside part of your monthly income towards paying off debts and building an emergency fund.
When you have a balanced budget, you will know where your money is going and do away with gaps in your expenditure that were leading you to credit card debt.
2. Start tracking your spending
Once you have created a budget, start monitoring where your money is going by tracking your spending. The primary purpose of this step is to help you know how much money you earn and where it is going.
This way, you will start making progress towards ditching your credit cards. Keep in mind that to do away with your over-dependence on credit cards, you need to gain financial traction and the only way to do that is to optimize the power of your income.
By scrutinizing your expenses and tracking your spending, you will start to see places where you can cut back to raise more cash for other top priorities.
For instance, you can cut back on your entertainment expenses to save more money for emergencies.
3. Create a plan to pay down your debt
Sometimes, it is much easier to break a habit if you have got a specific goal in mind. Therefore, if you have got an unpaid fast cash loan in Canada debt, commit to paying it down within a certain timeframe to free up more funds in the future.
Once you have paid off your debt, you will free up more funds to go towards your daily expenses hence reducing your dependence on credit cards.
You can also sit down with your partner and work towards achieving a shared financial goal that will free you from overdependence on credit cards.
4. Hide your credit cards from yourself
While creating a budget and tracking your spending might seem easy, sticking to these points and doing away with the urge to swipe away your financial deficiencies can be tricky. Therefore, the best thing to do is to get rid of the temptation altogether.
Consider taking an out-of-sight and out-of-mind approach and physically get rid of credit cards from your purse or wallet, so they are out of reach. Hide them wherever you want just to ensure you aren’t tempted to swipe them.
You can even take them to your loved and request them to hold onto your card for a few months. Within the few months they will be away from you, learn to live without them and within your means.