1. Spending more than we earn With credit cards, spending more than we earn is easier than ever. We must be committed to paying off the monthly balances we've charged. Carrying cash for purchases will keep us out of trouble if we can't make that commitment.
2. Always financing large purchases
Not that long ago it was customary to save up for big items. Paying cash for cars or even a home was something many people used to do. Today lots of us finance TV’s, iPods, and furniture because we can get a 6-12 month interest free loan. This is great if we are committed to paying off the balance before the end of the free period. Once that period ends the finance company is betting a group of us will opt to make minimum payments netting them a small fortune in compound interest. Don't be part of that group.
3. Buying the newest gadget
Don't buy the newest mobile phone or tablet on their release date. Wait a few months and many of these products are reduced or even included in our contracts for free. I've found several refurbished gadgets on eBay for close to 50% off original prices. Finwiz.
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