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If you work hard and save your money, there’s no chance you will fall into debt, right? Wrong. You’d be surprised to hear about all the dumb ways people can end up in debt. Most of the time, they get dazzled by expert advertising and end up parting with more money than they can afford. Other times, they don’t do their research when taking out a new credit card or loan. To prevent you from being dumb with your cash here is what you should be looking out for.

Payday Loans

When people are in debt, they often take out a payday loan to help get themselves back on track. However, they fail to do their homework and end up going with the first company they see. When thinking about a payday loan, it is best to shop around. Some company’s interest rates are off the scale, which will only increase debt. There are some companies that have a good reputation when it comes to payday loans, so try and go with one of them. You can see more info online at sites like www.ferratum.com.au.

Dumb Debt

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Not Budgeting

Poor money management is another big cause of debt. You need to know all the money you have coming in each month before you can start spending it. If you don’t know this, you are very likely to overspend. So plan ahead and create a budget. Try and stick to the budget religiously. Let your family know that you will be planning money more carefully. This way, the kids will know not to ask for as many handouts! If you aren’t sure how to create a budget for the month, there are many online guides including www.moneycrashers.com/how-to-make-a-budget/

Gambling

If you are in a bit of a tricky financial situation, you may think gambling will be a quick fix. However, it often leads to a slippery slope as it is very addictive. Even though gambling is often disguised as entertainment, it can often lead to something darker. It creates a vicious circle; the more we lose, the more we are willing to play to try and win our money back. It is best to try and stay away from any form of gambling completely. Instead of placing your money on bets, save it in a high-interest savings account where it can accumulate interest.

Dumb Debt

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Not Living Within Your Means

This might seem like a very obvious point, but there are many people who try to live outside their means. This is one of the fastest ways to spiral into debt. If you can’t afford the fancy new car or a posh holiday, then don’t buy it. By cutting down on extravagant living, you’ll never have to worry about debts again! If you are desperate to get your hands on something expensive, rather than take out a loan, try saving up for it.

Don’t be dumb and fall into debt. It can only get out of control and lead to serious problems!