Money mistakes that are keeping you in debt

Loans are like a double edged sword. With it, you are able to acquire things that would have cost you a fortune firsthand. Things like houses through a mortgage or that car of your dreams through a car loan are made possible through loans. On the flipside, staying in debt can strain your finances the more, ruin your credit score and render you totally financially helpless. Here's what you need to be aware you're doing that keeps you on the wrong side of things. 

Not having a realistic budget

Creating a budget is meant to guide your spending. It also helps to highlight for you what you need, want, and what you should do to achieve them. When you have an unrealistic budget, you'll be going overboard on your spending and mostly relying on debts to actually support your lifestyle. Ensuring that you also create a budget to allow you to live according to your means is very key. Keeping up with the Jonases will only burden you more financially and is a grievous money mistake. 

Lending people money you can't afford to lose

There's a principle of lending people money regarding your open mindedness in losing the money. Whereas it's not bad to help out when you can, breaking a bank or depending on someone to pay you back is plain off. As a rule of the thumb, when you decide to loan someone, assume you've lost that money. Otherwise, you will plunge into debt to survive yet a debtor would have paid you, which they haven't. 

Spending money on unnecessary items 

This includes subscriptions that are barely used, to items bought on plain impulse. In many cases, you'll realize that these items are paid using credit cards. Indeed, credit cards offer you a level of financial freedom by unlocking to you ways of acquiring items you normally wouldn't have. However, if you tend to spend money without much thought, this trend will hurt your finances in the long run. 

Delaying in pay your bills and taxes 

Bills are meant to be paid and paid on time. Not only is this meant to offer you great peace of mind, but also saves you from accruing interest rates that are unfathomable. The more you delay, the more the money you owe goes up. This tendency will plunge you deeper into debt instead of helping you clear it. In light of filling your taxes, the earlier you file them, the less likely to have negative balances and get fines. 

Failing to invest 

The one way of growing your income involves being able to make the money multiply. Investment does that, by creating opportunities for your money to actually work for you. Whether it's on shares, bonds or certain businesses, failing to invest is a missed opportunity that limits your financial expansion and keeps you in the same place you were. 

Living without an emergency fund

When you hear financial experts mention that it's important to have savings for six months worth your salary in savings, you may think they are joking. In actual sense, failing to have one will definitely plunge you into debt when you begin battling with financial woes. It's not all the time that family or friends will cushion you during hard financial times. In these cases, you're meant to have a well laid out emergency fund.