The movie Groundhog Day has forever changed how people associate the phrase with the actual holiday. It’s more than just a groundhog and its shadow; it’s about getting a do-over. It’s never too late to learn how to examine your financial mistakes to avoid consumer debt down the road.
How to Learn from Groundhog Day to Avoid Financial Mistakes
Just because you failed doesn’t mean you can’t get something from the experience. While you can’t go back like in Groundhog Day, you can move forward with new knowledge. Learning from financial mistakes is not as easy as it sounds. You need to first understand your mistake and then take the necessary steps to avoid consumer debt in the future. Let’s walk through 3 financial mistakes and how to move past them.
Credit Card Debt
Did you ever have to overcome credit card debt? It’s easy to rack up consumer debt using plastic. In this case, knowing if you are an impulsive shopper versus paying for unexpected expenses on the card makes a big difference in how you would avoid debt again.
If you tend to overshop, avoid consumer debt by eliminating credit cards from your wallet. Or avoid the stores that you splurge in regularly. Find ways to curb your behaviors. If you ran into large medical bills or unexpected repair costs, you should consider starting an emergency fund.
No Emergency Fund
Emergency funds are a great financial tool to combat debt. Dedicating money for emergencies is really important when unexpected things come your way. If your car breaks down, the refrigerator dies, you get laid off and your cat needs to go to the vet all in one week, you’ll wish you had money earmarked for such events.
Hopefully, that kind of week will never happen to you. If it does, you can avoid credit card debt by having cash on hand. Build your emergency fund over time to help cover unexpected hits to your budget.
Spending Too Much on a Wedding
Another common financial mistake is spending too much on your wedding, or when you attend someone else’s wedding. You may or may not get married again. The lesson to be learned here is to make sure you budget appropriately for large events. Don’t let consumer debt sour your special day for years to come.
Start with the total dollar amount for your wedding budget. Then you can prioritize expenses instead of guessing. If there is only $200 left for decor, then you need to make it work for $200. The less guesswork in an event budget, the less chance there is for credit card debt.
If you have little to no money and need to fly across the country for a wedding, you need to graciously decline the wedding invitation. This is not the time to use your credit card. Don’t feel bad about this! They will understand and appreciate your financial situation (they may be feeling the heat as well from their own wedding expenses).
So remember that everyone makes financial mistakes. Take some time to diagnose yourself to see if you need to change behaviors or manage your expectations and budgets differently. USe this and every Groundhog Day to evaluate your money moves.
To learn more about budgeting and debt management options, call 800-769-3571 to speak with a certified credit counselor at American Consumer Credit Counseling.