Are Improved Financial Habits Falling By The Wayside As Economy Picks Up Steam?

American consumers say the economy has changed their spending habits for the better - but is the change permanent?

While 63% of people in last year's Citigroup survey reported that the recession has had a positive effect on their spending and saving behavior, only 52 respondents say the same today. Perhaps now that incomes are rising once again, we feel a little more secure. And maybe some of us are so used to the new economy that we've become numb to possibilities that once struck fear into our hearts - like pay cuts and layoffs. That's understandable. What's not so understandable? The fact that consumer debt is increasing, say Atlanta bankruptcy attorneys.

That's right, with paychecks getting fatter, more people are spending - and some of them are doing it with credit cards, car loans and other forms of debt. But if we finally have more money in our pockets, why are we using a method that involves paying a premium (i.e. interest) and building a burden that may haunt our finances long after the economy picks back up?

Instead, why not figure out a way to incorporate the good habits we've learned over the last few years with the freedom to splurge a little now and then? Like any good diet or exercise plan, it's all about moderation and balance.

Sure, when your paycheck increases, it's OK to loosen your family budget a bit. Maybe treat yourself to a meal or movie out now and then, and go on the occasional shopping spree to replace well-worn clothes. But if you want to maintain - or increase - your sense of financial security, make sure not to let other smart money moves fall by the wayside. For instance, instead of a new car - and a high-interest car loan - consider a pre-owned vehicle; it won't suffer from such a significant decline in value the moment you drive off the lot and you can pay for it, at least to some extent, with cash. If you've been surviving just fine without cable or a land line, why start paying for them again? Especially when you can watch movies online for free, and talk just as easily on your cell.

Most importantly, if you've spent the last couple years putting less on your credit card, why jeopardize your progress - and your future - by ringing up debt again? Many of us still have residual debt from during or before the recession. Instead of adding to it the moment you've got more change jingling in your pockets, why not use that windfall to help eliminate debt, along with interest, late fees and other debt-related problems?

Reducing debt can save thousands over the years, enough to make your recent pay raise look like a drop in a bucket. Even if you aren't one of the lucky consumers to finally get that pay increase or new job, you can still eliminate debts and free up your finances. Bankruptcy can be one of the most effective ways to lower debt when you can't afford to do it alone. Find out more for free with a complimentary personal debt analysis courtesy of an Atlanta bankruptcy attorney.

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