Four ways debt sneaks up on you—and what to do about it

Unless you track your overall spending with every little purchase, debt can ambush you. Fortunately, you can prevent it from piling up; you just need to be aware of the ways in which you spend money. 

Here are four common causes of debt that aren’t always obvious: 

1. Lack of a budget. 

If you don’t know how much money you spend every month, you may be in for a world of hurt when that credit card bill arrives. Check your credit card and bank account statements to start tracking your expenses. You may be spending more than you think on things you don’t really need. Make adjustments and budget accordingly. 

2. Taking trips on credit. 

It’s easy to get wrapped up in vacation fun—just make sure you’ve budgeted for it. Try to plan your trip as far ahead as possible, so that you account for airfare, lodging, and daily expenses. Putting it all on a card and figuring it out later can dig you deeper into debt. 

3. Never saying “No” to your little ones. 

It’s never easy to say “No” to your children when they ask for money for, say, a must-have toy. But if you rely on credit for every request, it can hurt your family finances. If you know they’ll want to attend a certain camp or play sports during the upcoming school year, start saving now. 

4. Paying debt with credit. 

Transferring balances to lower-rate credit cards and debt consolidation loans can be helpful. With these options, your debts are rolled into one sum at a more affordable rate. However, make sure you can pay it off. For example, let’s say a promotional rate expires on a credit card, and the APR jumps. If you can’t afford your new interest rate, you may have to transfer the balance again. If you’re using credit to pay debt, always have a plan in place to pay for it.