There is one important question we have to ask ourselves before purchasing something, do we really need it?
Around 5.8 per cent of British adults (80% of them being women) suffer from compulsive shopping or oniomania, which is a disorder that causes devastating effects for the individual and their family. It is an illness that should be treated just like alcoholism, gambling or any other disorder such as anorexia or bulimia.
We live in a culture that gravitates around spending. Regardless of our difficult financial times, we are still bombarded 365 days a year by strong, persistent advertising and marketing strategies promoting lofty material goals; producing absolutely false needs and wants and making people feel they are not worthy if they don’t own a particular brand of clothes, the latest fashion, or the ultimate electronic gadget on the market.
This is a problem that must be taken seriously, because this behavior can lead a person into debt. Debt has destroyed marriages, relationships, families, businesses, lives, and even brought down countries. Getting out of debt might be a hard task, but it’s a possible one to accomplish.
The progress begins by making a conscious decision; you decide when it's time to be debt-free. Organize your debts in categories; such as how much is your debt and whom you owe it to. Then figure out an order to pay it off remembering that making double of the minimum payment on every card can speed up the process. If you make only minimum payments, it could take you up to 12 years to pay off a credit card balance of just £ 2500.
Accelerate your mortgage payments by paying a little extra every month or by renegotiating mortgage rates depending on the loan status in your agreement.
By being responsible with your debts, you will raise your credit scores. As everyone knows, a low credit score will cause lenders to charge you a higher interest rate or deny credit, therefore making getting out of debt even harder. Lenders take a hard look at how you've managed your finances, whether you pay your bills on time, and how much risk they'd be taking by extending you credit. It is always advisable to check the status of your credit with any of the three main credit reference agencies: Equifax, Experian and Call Credit.
Avoid falling for debt consolidation loans or debt settlement offers; they are usually a rip off. Debt counselors usually promise to get rid of your debts but in majority of cases you will get little or no help. It might be beneficial to seek for ‘non-profit’ credit counseling services.
Probably the best and most effective way to entirely avoid debt is to not borrow money to buy stuff you don't unreservedly have to have. There is nothing like living debt free.