How to Recover from Compulsive Spending and Bad Debts
Over the years we have come across hundreds if not thousands of clients who are bewildered by their financial obligations. One thing is clear that debt sneaks up on you until the monthly amounts owed to credit providers reach unmanageable proportions.
Too often do we see that even small issues such as a once-off motor vehicle repair can tip the balance for the borderline over-indebted consumer to being over-indebted. This is because they have no savings on which to fall back on. If you are in debt the worst thing to do is hiding. The best thing to do is tackle the situation head-on and with a little bit of help and articles like these you will find that you can handle your debts. We have compiled a list of suggestions to handle spending and debt.
Another problem is the issue of compulsive spending.
Shopaholics have made their track records from their unmanageable spending routines. In these circumstances, unhealthy habits can turn into a full-time issue of compulsive spending.
- Compulsive spenders will buy items that they do not need. Each month their clothes and shoe cupboards get filled with shoes and clothing which they will hardly use and don’t even think of using in the future.
- Compulsive spenders are spending more than what they earn each month and turn to credit cards and loans to maintain their unhealthy spending nature.
- Compulsive spenders will never admit that they have a problem.
- Compulsive spenders will conceal their problems from close friends and family.
Create a Budget - Keeping an eye on your finances using a budget
Most consumers don't realize that they are soon heading to becoming over-indebted. The reality, unfortunately, is that most of these consumers will only recognize that they are in trouble the month they are unable to pay all their credit obligations. When you're faced with what is a huge mountain of debt, it may seem extremely hard to visualize overcoming it. Nonetheless, with some attentive budgeting, you can settle your debt without changing the quality of your life. Regardless of how big your debt is, you can create a plan to start working on repaying your debts
To prevent ever getting into debt it is vital to set up a realistic budget with exact net income and expenses. The hard part is to stick to the budget and over a couple of months of budget spending, you will find it will get easier to live on a set budget. To live within your means, it is vital to create a budget to understand how much money is available to spend and how much money is available for savings.
Step - Setup a budget that is practical and realistic. Follow your spending plan.
Credit Cards versus Debit cards
If you know that you are always tempted to overspend on credit cards, leave them in your car when you go out shopping. Using your debit card for purchases as opposed to a credit card will help with over-spending.
Step- leave your credit cards at home and only use in emergencies
Establish a Spending plan
To take control of the financial circumstance you need to use your money in a sensible way and by sticking to a budget. In this budget, it is vital to show how much money you have each month after taxes and medical aid deductions. Next step is to record all your living expenses and creditor expenditures. Document all the spending during the month to track spending patterns. The goal of your budget and spending plan is to make sure that your living costs get catered for before any discretionary spending.
Step- Establish a spending plan and cut unnecessary spending
Contact your credit providers when faced with problems
If you're having trouble paying your debt, contact your credit providers as soon as possible. Tell them why you have fallen behind and attempt to repay the arrears before the account gets handed over to collections firms.
Avoid pricy holiday getaways
You have set up your realistic budget and you are sticking to it and in the process, you are repaying your debt. Repaying debt without the help from a debt counsellor you might be stressing trying to stabilize job and family life. To ensure your career and family life do not get affected by the debt-related stress you will desire a holiday trip. Now is the time to stay levelheaded and this is the time you will need to be creative to take a break.
When you are drowning in debt, it is advisable to avoid those expensive getaways. If you don't take a break and you are under stress and anxiety because of debts, you might experience burnout. To stabilize your stress, anxiety, and your demand for relaxation, we would suggest a cost-effective local getaway.
A cost effecting weekend away camping is a smart way to leave your headspace without having to spend on an expensive holiday.
Consequences of overspending
- Wild spending without having a budget and overspending will Lead to serious Consequences
- Overspending can ruin your marriage
- Overspending can Damage Your Career
- You will become a deceptive person trying to hide your overspending habits. This deception might hurt family, friends and relationships.
- It Compromises Your Health
- It will hurt your credit score with all the credit bureaus in South Africa
4 Main reasons debt is bad for you
- Without realizing it you will be spending more money on an item if you used credit to buy the item due to high-interest rates
- If you are not the owner of your home debt can keep or delay, you from buying your own home
- Debt can destroy marriages Marriage and debt
- Debt will hurt your credit score
Debt Counselling Solutions
We are proud that our debt counselling company will assist you to get out of debt by reducing your monthly instalment due to creditors. The debt counselling process with reduced interest rates as well as charges will include all your eligible accounts. You will have a single reduced monthly instalment to pay. This instalment gets paid over to a payment distribution agent. Our PDA will pay all your financial institutions according to our repayment proposal.
Start working on paying off your debt today to get your finances on track. The good news is as soon as your debt gets settled you will then be able to save for your retirement. Contact us today to let us assist you to be debt-free. Contact us and we will advise in detail of the benefits of debt counselling or simply visit our debt counselling page for more information.
Alternatively, you may visit the National Credit Regulator website for valuable information on debt counselling.
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