Avoiding Bad Credit History by Learning Not to Overspend


Credit-Land.com is an independent, advertising-supported web site. Credit-Land.com receives compensation from most credit card issuers whose offers appear on our site. Compensation from our advertising partners impacts how and where their products appear on our site, including, for example, the order in which they may appear within review lists. Credit-Land.com has not reviewed all available credit card offers in the marketplace.

Credit Card Applications » Research » Guides » Building Credit History » Avoiding Bad Credit History by Learning Not to Overspend

Avoiding Bad Credit History by Learning Not to Overspend

Updated: December 26, 2012

The content is accurate at the time of publication and is subject to change.
In a country whose economy is based on consumerism, we all have the tendency to overspend. We spend without regard for how much we actually earn which has then caused bills (from credit cards and loans) to pile up. In order to prevent the situation from going bad to worse, we have to start understanding where our money goes. If you are suffering from bad credit history and you want a way to spend your resources more effectively, then you had better start a budget. How is this done? Here are a few tips: Be diligent in keeping track of your daily expenditures. It`s like you making a calendar of activities - you also have to breakdown your daily expenses. Everything you have to spend on a week`s course should be jotted down, going into details and paying attention to cash expenses. Preparing daily, weekly and monthly budget helps you compare your expenditures to your income. Record every expense you pay on cash or transactions made through ATM or debit cards, including bank fees. For your income, record your savings and investments. It`s not only your expenses that you have to consider, the other half is your monthly income. List all your sources of income, sales commissions, dividends and interests, bonus pays, pension or retirement income etc. Know all the deductions you will incur, and make an accounting of your total monthly income. This way, you can get an idea on how much money you can utilize for necessities and luxuries. Now that you have identified your expenditures and income, it is now time to plan your expenses. Your goal here is to save and not to overspend. Here`s a suggestion on what you can write down in your budget plan: 1. On a piece of paper, write down a category detailing your probable expenses. Some categories you can utilize include: Home (rent/mortgage, property taxes, renter or homeowners insurance), utilities (electricity, gas, water, cable, phone), household supplies, food (groceries, breakfast, lunch, dinner, snacks), apparel (clothes, accessories), self care, health care, transportation, entertainment, travel, and many others. With this list readily available, you will have an overall idea on what you`re spending for and how much you can allot from your income. 2. To prevent financial problems, you have to scrutinize your budget very well. Allot a realistic amount for every item and stick to it. Do not buy impulsively. If you make a grocery list, then make sure you buy only what`s listed. Avoid purchasing items which are on sale especially when it`s not on your list. Chances are, you won`t need it. 3. Oblige yourself only to what you can afford. Before you look for a house to buy or rent, you need to know first how much you`re willing to spend. A good practice is to take out a loan first and use only the amount approved. This way, you won`t need to take out a second mortgage. 4. Avoid cosigning or being a guarantor for someone`s loan. When you`re a cosigner, you are obligated to pay as if you`re the primary borrower. There`s a risk that the borrower might not pay.

Disclaimer: This editorial content is not provided or commissioned by the credit card issuer(s). Opinions expressed here are the author's alone, not those of the credit card issuer(s), and have not been reviewed, approved or otherwise endorsed by the credit card issuer(s). Reasonable efforts are made to present accurate information, however all information is presented without warranty. Consult a card's issuing bank for the terms & conditions.
All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.
Add to Favorites:
Get the latest news, articles and expert advice delivered to your inbox. It's FREE.

Related Research:

Top 5 Cards for Travel from Our Partners: Autumn 2018 – Expert’s Choice

Top 5 Cards for Travel from Our Partners: Autumn 2018 – Expert’s Choice

Posted: February 12, 2018

Nights are drawing out, the wind is colder every day and you already feel the lightest breath of winter on your face - autumn is here. Holidays are over, kids are back to school and all you are left with are hefty holiday bills that you ... Continue reading
Cash Back or Travel Rewards? Here’s How to Decide On The Right Card

Cash Back or Travel Rewards? Here’s How to Decide On The Right Card

Posted: February 10, 2018

If you're trying to find the perfect rewards credit card, you might feel like you're drowning in options. There are just so many out there, and many of them look similar. This can make it tough to decide on a card. One thing people often ... Continue reading
Price Protection: Credit Cards That Will Refund a Price Drop

Price Protection: Credit Cards That Will Refund a Price Drop

Posted: February 8, 2018

Those who often find themselves buying stuff and then discovering that they could pay less for the same item they've just bought, will appreciate this credit card benefit – price protection. This is the least known and the most neglected ... Continue reading
You've successfully subscribed!

Please specify the following:All these fields are optional

Your Credit History
Themes you are interested in:

By providing this information you help us make our news letters more useful and informative. Thank you!