How To Stay Debt Free
It all starts with a small amount. At first sight, you think this is nothing – you will be able to manage it, and will get rid of it shortly. However, the further you go, the harder it becomes. And this small, manageable amount starts becoming unmanageable. It takes over your life. Yes, I am talking about debts.
Want “The Best Advice” on avoiding debt? The answer is: not to have any debt at all from the beginning. Follow these simple tips to stay out of debt:
· Pay cash. Paying cash forces you to spend only the money you have. If you don’t have the money – it means you can’t afford it. Don’t buy things you can’t afford.
· Use credit card only if you are able to pay in full each month. Beware of credit cards. Most of us fall into debt trap because of credit cards. If you aren’t able to control credit cards, get rid of it.
· Avoid falling behind on your payments for your bills. If you start falling behind even only once, it will be hard to catch up.
· Know your monthly income and expenses from all sources. To live debt free, income has to be greater than expenses. Maintain this ratio by cutting expenses.
· Use personal finance software to track your income and expenses. When you visualize your spending pattern, it’s a lot easier to analyze and comprehend where your money is going.
· Spend within your limits. Don’t buy stuff just because they are on sale. If you don’t need it, sale is not going to do any good.
· Always buy on sale. If you are certain that you will be using items on sale over and over, buy them when they are on sale and stock up. Avoid paying full price.
· If you already have accumulated credit card or other consumer debts, pay them off ASAP. Always pay over the minimum. Start paying off the smaller debts and move to the larger ones.
· Set long-term and short-term realistic, doable goals. For example, short-term goals can be paying off smaller debts and long-term goals can be paying off larger debts and start saving money.
· Be realistic. Set attainable and achievable goals. If your spending is more than your income, cut down on spending. However, if this is not possible for you, increase your income and stay in debt-free positive territory.