Like most things, debt is not the end of the world—in moderation. Most Americans carry some debt these days, be it student loans, a mortgage, credit card balances or some combination. But ultimately debt only serves to hold consumers back from larger financial and life goals.
For this reason, it’s always a good time to start chipping away at your debt however you can. Start by looking at your spending habits: How are they contributing to your debt?
If you notice yourself engaging in any of these six habits, consider how you can modify them to save your hard-earned money and slow the debt cycle.
Setting—and Forgetting—Subscription Services
Subscription offers are everywhere. And they can be mighty tempting. There are more entertainment streaming services available than ever before. Subscription ecommerce has taken off, requiring shoppers to sign up just once to receive recurring deliveries of goodies to their doorsteps. Many busy consumers utilize meal kit delivery to stay on top of cooking nowadays. Media platforms and publications often operate based on monthly subscription models. You can also pay a regular fee to use shared workspaces, athletic facilities, and the like.
The point is: You may have more subscriptions active than you think. Sure, it’s only $5 or $10 or $50 dollars a month, but these costs really add up over time. One study found participants spent an average of $237.33 per month on subscriptions—197 percent more than they first estimated before seeing an exhaustive list of subscriptions. This just goes to show people often underestimate how much they’re spending.
First, log all your subscriptions and how much they’re costing you. Then make cuts based on which you actually use and which you can live without.
Putting Nonessential Purchases on Credit Cards
Credit cards are useful tools for building your FICO score and breaking down larger purchases into more manageable installments. You may also need to pull out your credit card next time you face an unavoidable medical expense if your emergency fund is running low. But credit can become problematic when you start to depend on it to float nonessential purchases like food, clothing and travel.
Try to limit credit card use to only what you know you can pay back within a reasonable timeframe. Avoid racking up interest on nonessentials to stymy your debt at its source.
Dining and Drinking Out, Frequently
Dining and drinking out is fun. There’s nothing wrong with wanting to catch happy hour with your coworkers, a date night with your significant other or simply a break from cooking for the family. But the cost of eating and drinking out, plus tips, adds up fast.
Using an expense tracker app like Clarity Money will help you track your spending across categories. If you notice restaurants and bars are eating up a large chunk of your monthly income, get creative. Look up some new, frugal recipes. Host a potluck dinner for your friends.
Buying Items “Because They’re on Sale”
It’s so easy to justify buying something because it’s on sale. It’s hard to argue with a bargain. But this shopping strategy can quickly run up your bills—and feed an addicting cycle of gratification. As challenging as it is, you’ll be better off in the long run if you only buy online or in-person what you absolutely need or want for a valid reason. Stop treating a discount as reason enough to whip out your wallet.
Paying Late Fees on Credit Card Bills
At first glance, credit card late fees are no reason to sweat. A one-off payment capped at $28 for a first offense and $39 for subsequent violations won’t break the bank. But falling into the pattern of tacking on late payments to credit card balances adds up. Plus, your interest rates will climb, making it even harder to pay off your outstanding balance.
Get into the habit of paying at least the minimum balance due, on time, every month. Then work on increasing how much you’re paying.
Making changes in your spending habits will help free up money to address your debt before it spirals out of control.