First of all, this is the biggest mistake that you can possibly make. Paying off debt with more debt may solve your problem at this moment, but you will be in big trouble later on. Increasingly high amounts of interest will be a struggle and you will have a hard time recovering after abusing credit in this manner.
Furthermore, not knowing how much money you’re spending on each expense can be very dangerous. It doesn’t matter whether you’re a big income earner. Failing to budget could cost you your financial freedom. Watch out! “A small leak can sink a great ship”.
Keep an eye on all of your accounts and create a well-balanced budget that you can stick to.
Consequently, being in arrears on accounts and even paying the minimum amount on your credit cards could leave you in enormous amounts of debt. By paying the minimum you are scarcely covering the interest on your accounts each month. This means that the amount of debt will just keep growing each month. Eventually, you will have no other choice but applying for Debt Counselling.
Remove a few luxuries from your budget and pay at least twice the minimum amount on your accounts to ensure that your debt is paid off in a shorter time.
Most important, don’t get too comfortable when realizing that you can cover all of your expenses in a month. It is essential to save a good portion of your income to serve as an emergency fund. While, If something happens that you weren’t planning for, you will have no money available to fund it. You also won’t have any money for the loan you are planning to take out because of the unforeseen circumstances.
Finally, borrowing money from friends and family won’t be a solution for you. Once again, it solves you immediate problem. It will inevitably leave you with even more troubles I the future and could ruin your relationships.
