No person should spend more than they earn. Otherwise, you will have to go into debt to assume that expense. If you have already done so, starting next month, you should generate a surplus in your income and reduce your expenses. You have to create a surplus or savings to pay the debt.
A frequent mistake in many people is to assume the credit card as part of the salary and turn it indiscriminately. It is worth making a parenthesis to distinguish debts for investment from those intended for consumption. Debts exist in all areas, personal and businesses. Some companies can assist businesses with debt collection, such as a collection agency, but monitoring your habits will stop you from becoming stuck in a rut in personal circumstances.
People are not always aware of the economic slowdown and maintain their spending level, even though the average income of the population decreases. Over time, they will discover that they can no longer support that level of expenses but will prefer to go into debt to maintain it. In the long term, these practices increase delinquency in the financial system.
A frequent mistake in many people is to assume the credit card as part of the salary and turn it indiscriminately. They think they have more resources than they have. Therefore, they accumulate unpayable debts that they only have to refinance. Therefore, all current expenses must always come out of your net income or salary, and the card will only be used for tangible objects.
Getting into debt is not a matter of earning little or a lot of income; it is a matter of discipline. And in most cases, it is due to poor planning and management of personal or family finances. Of course, some psychological factors may influence, which are unfortunately reinforced by the trend towards high consumption in our society, or perhaps unforeseen economic events, or very likely a combination of all. Among the psychological factors or behaviors we can mention:
- Emotional deficiencies that are sought to compensate through purchases
- Unfulfilled wishes
- Low tolerance for frustration
- Lack of the ability to delay; that is, there is no ability to save because immediacy is needed.
When an emotional factor causes financial problems, they are most likely not aware that they need help. This is where family or close friends can support them, talking about the delicate issue and guiding them to find a solution.
Lack of Planning and Administration
When a person falls into debt that has gotten out of their control, they inevitably enter a situation of continuous wear and tear, lose their financial peace of mind, and face constant stress caused by the accumulation of overdue payments and the lack of money. As the income does not yield, in a moment of desperation, asking for a loan may seem like a solution, when what is achieved is falling into an endless imperfect circle, plugging a hole and uncovering a larger one. The outlook becomes more complicated; worries can generate bad moods, health problems, social isolation, and even damage personal relationships due to constant restlessness. In reality, what is needed is to look for other income and generate more income and adjust the budget and learning to live with less.