There are some things that we do get into debt over. Mortgages, cars and education to name a few. These are all worthwhile investments, and when managed correctly, the debt won’t spiral out of control. The debt that most people want to avoid is getting into debt for everyday things or consumer products. They are often at higher interest rates, and it can completely spiral out of control if you don’t keep up with the repayments. Once in debt, it can be difficult to get out of it, living day to day on what money is available. People often make the mistake of getting into more debt, to clear other debt. So here is some practical advice that you can use, to avoid getting to debt in the first place.
Budget
This is the most important. If you don’t know how much you have to spend, you will almost certainly get into debt. There are lots of sheets or databases that you can find online; that will help you to create a budget. The key is being honest with yourself and having the up-to-date details of your expenditure and bills. Budget for the things you have to spend on first. Then see what is realistically available for other things like hobbies or luxuries. It might be a good idea to set up a savings account for a little to go into each month. This could then be used for going to the movies or getting those new shoes that you just have to have.
If you find that you need a little cash upfront, you could visit somewhere like http://www.PersonalMoneyStore.com. This is useful when you know you have some income coming in. If you put this into your budget and make repayments, you should be able to avoid debt.
Make Extra Cash
If you do get into a little debt or need extra cash, it can be tricky just to say you’ll spend less. Often this doesn’t happen. It can be hard to spend less on your food bill or for your car. You still need to drive to certain places, and you need to eat, so long term, those cuts will only save a little. The thing to do is look for a way to get a little extra income. Could you take a part-time job at the weekend? How about during evenings? Thing that you can do working from home are a great idea too.
You could also consider having a clear out of your things at home. Are there a lot of designer clothing or baby items that you could sell? There is a large variety of selling sites on the internet, a lot of which are free to use. The important thing to remember is to put that money aside to pay off bills, rather than spend on new things for yourself. Otherwise, having a clear out was pointless.
Credit Cards
If you are strict with your budget and plan well, a credit card can be of great use. There are a lot of cards available that will give your various rewards. If you want to choose one, go for one that is suited to your life. Would one that offers cashback on purchases be best? Or one that offers 0% on travel money or purchases abroad. If you travel a lot, the latter could be a great option for you.
Avoid Large Spending
If you are trying to avoid getting into debt, it probably wouldn’t be wise to get a new extension on your home. It won’t be a good idea to get a second car if your family doesn’t need it. We all like to make changes, though, so think about cheaper options. If you feel like your home needs an update, how about painting a room a lighter colour? It will make it look so much different and airy and spacious. Move furniture around. Perhaps get a new throw or pillows to add a pop of colour. Small things can make big differences in the home. It will save so much more money than changing big things too.
The final thing that I think is important is just to save as much as you can. Do you need to go out for that meal or could you just cook at home? Do your friends need such extravagant birthday gifts? The answer is most likely no. Still get them a gift, but spend less. The savings will add up, and you will avoid debt. There is not much sweeter than that.
