John J. Bowman Jr Accountant, John J. Bowman Jr. Accountant, personal finance

4 Reasons People Accumulate Debt

22 trillion. That’s how many dollars the United States of America owes to world powers such as China. Debt can be a worrisome four-letter word, not just for the country as a whole, but for its independent cogs and gears as well. While the average American doesn’t owe $22 trillion of their own cash, debt is still a reality for many. Below are four ways debt can accumulate. Do you recognize any of these in your own life?

Credit cards

Plastic beats paper in the world of transactions; over the past several years, cash payments have increasingly given way to credit and debit card charges. And, while 90 percent of consumers still use cash for some purchases, the age of credit card swiping and chip reading draws closer. However, credit cards make it easier for consumers to purchase items, sans the lighter wallet. Credit card debt has steadily risen over the past five years, and it can be easy to fall down a rabbit hole of debt if paying by card is your preferred method of shopping.

Poor spending habits

We’ve all splurged on a snack at the grocery store or a newly-released book. While the occasional treat is fine, purchasing a treat every day is a red flag. Poor spending habits are easy to fall into and difficult to climb out of, particularly if you aren’t the only member of the household struggling to save. Taking time to learn how to manage money is vital for anyone who wants to avoid falling into debt. In fact, creating a personal spending rulebook can help you and your household members understand the impulses behind your spending and ways to avoid personal debt.

Gambling

Any casino from NYC to Vegas employs psychological and mathematical tactics to take your money. From the absence of windows and clocks to lengthy slot machine algorithms, casinos are practically vacuums for your wallet. Gambling disorder is officially recognized by the DSM-5 as a psychiatric concern, and the impact it has on one’s money is no joke. Avoiding the casino is a sure-fire way to not waste your money, and there are plenty of free ways to have fun.

Loans

From student loans to mortgages, this type of debt is often the least controllable. While one can practice appropriate spending and avoid gambling or credit card usage, loans are often necessary to move forward in life. In this case, the best strategy is to stay on top of the debt and follow a strict regime for saving up to pay them off.

This article was originally published at JBowmanAccountant.info.

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blog, John J. Bowman Jr. Accountant, personal finance, Uncategorized

How to Curb Overspending and Avoid Debt

One of the most common problems adults deal with every month is efficiently managing their finances.  Depending on your salary, and your regular monthly expenses, you may find yourself struggling to stay afloat or save some extra money.  If you’re wondering where your paycheck is going, you may want to take a deep look into your spending habits. While you may be covering all of your necessary bills, you may also be overspending on things you don’t necessarily need.  Not to worry; this is something many adults deal with, and there are plenty of solutions to help better manage your habits.  Here’s how:

Track All Spending

The first and most obvious step to curbing your overspending is tracking your spending in general.  Every week, you should track where your money is going. By the end of the month, you should have a compiled list of what you’re spending each week, and where you can cut back.  Seems like an easy task, and something you really wouldn’t need to track; however, the smallest purchases can really add up and make a significant impact if you have enough of them.  For example, if you’re someone who goes out to lunch on your break from work, you’re likely spending almost $10 a day, if not more! This ad’s up to a minimum of $50 that you could be using for necessary bills, or putting into your savings account!

Know Your Spending Triggers

It’s not uncommon to spend based on your emotional or psychological triggers.  Things like your mood, environment, friends, etc., can really dictate the way you’re spending.  Take notice of this. Recognize what you’re feeling, or doing when you’re out splurging on things you don’t need.  For example, if you’re an emotional spender, you may find the need to go on a spree if you’re feeling down or even happy.  However, when you’re trying to save money, this can be detrimental to your savings plan. Be aware of your triggers, and do what you can to supplement them in ways other than swiping your credit or debit card…

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