Why Do We Make Bad Financial Decisions?

There are all kinds of reasons why we make bad decisions about spending and borrowing money, from peer pressure right through to sheer recklessness. This article from debt gurus Bankruptcy Clinic sheds light on some of the more common reasons why people might find themselves in a financial mess – unwittingly or otherwise.

financial decisions

 

  1. Supporting an unsustainable lifestyle

We’d all like to be living the high life, but if your income doesn’t match your aspirations, there may be trouble ahead. Living beyond your means may seem manageable at first, but if there’s a big change in your income or outgoings, your debts could spiral out of control very quickly. So if you’re finding yourself splashing out on designer clothes or luxury holidays that you can’t really afford, nip the problem in the bud before it’s too late.

 

  1. Wanting everything now, not later

Of course, it’s much easier to buy what you want with a loan or credit card than save up for it. And it’s especially tempting if the item you want won’t be around for long and you feel the need to snap it up now. But it’s better to stop and think before plunging yourself into debt that you may not be able to afford to repay. Consider your existing outgoings – can you really afford the repayments on another credit card, loan or ‘interest free’ agreement? If the truth is that you’d be feeling the pinch, steer clear and start saving instead.

 

  1. You follow the herd

It doesn’t always pay to do what our peers are doing – especially if it involves spending cash like water, living on credit or never saving a penny. Don’t be tempted just to join in. Dare to be different and make sensible choices about your finances and lifestyle. Open a savings account, set up a pension and keep your loans and credit cards under control. We can guarantee you won’t regret it!

 

  1. Experiencing a change in your life

Losing your job or taking a pay cut, being made redundant, retiring, splitting up from a partner, meeting a new partner…. There are all kinds of life changes that can affect the decisions we make about our finances. Whether it’s a refusal to accept the constraints of living on a lower income to throwing money around in an attempt to impress, a change in your circumstances can be bad news. So take the time to consider the impact of altering, or not altering, your financial habits when things change.

 

  1. You’re stuck in a rut

The sad truth is that if you’re already having money problems, you’re even more likely to make poor decisions about your finances. More often than not, it’s the people with no real money to spare who buy a dozen lottery tickets, take out payday loans at extortionate interest rates or drown their sorrows down the local every weekend. The inevitable result is that the cycle of indebtedness and poverty can become very hard to break.

 

Time to turn your life around?

We all make bad decisions in our lives at one point or another. But if you’re in debt because of a poor financial choice, don’t feel there’s no way out. The first step towards regaining control is to take professional advice so you can start overcoming your debts and manage your money properly in the future.

 

Talk to Bankruptcy Clinic

The friendly, qualified team at Bankruptcy Clinic are ready and waiting to help you deal with your debt problems. It doesn’t matter how much you owe or who to – we’ve seen it all before. Our job is to help you find the right solution so you can start tackling your debts and move on with your life. That might be bankruptcy, or a different solution such as an Individual Voluntary Arrangement, Debt Relief Order or informal Debt Management Plan.

 

The sooner you get in touch, the sooner you can find out which options might suit you – and the sooner you can start making sound financial decisions instead of bad ones.

 

Contact Bankruptcy Clinic

Just give us a call on 0808 168 7389 (free from a landline) or 01625 462 770, or apply online to see if you qualify for debt help.

Andy Gorton is the author and editor of the Bankruptcy Clinic
http://www.bankruptcyclinic.co.uk

Andy Gorton – who has written posts on Bankruptcy Clinic Blog.


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