10 Tips To Stay Out of Debt

 10 Tips To Stay Out of Debt For Good

With almost everyone in the world struggling with debt of some kind, it can be hard to stay out of the red. However, there are plenty of simple steps you can take in order to avoid going into debt in the first place and then do what you can to work towards eliminating it once you have made that mistake. In this guide, we’ll give you 10 tips to always stay out of debt so that you don’t have to worry about dealing with financial problems anytime soon.

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Staying out of debt is easier than most people think

simply follow these ten principles, and you can make sure your debt is never a burden on your shoulders. It’s simple: if you don’t buy it now, you won’t have to pay for it later. If something comes up that is vital and absolutely necessary, consider saving up for it instead of taking out loans.

1) Think about things you want before you buy them

You’re less likely to overspend when you plan your purchases in advance. Think about what you really need and what would be nice to have, and save up for that. The key here is not spending money on things you don’t actually want, and whether it’s a fancy dinner or a new smartphone, it’s easy to end up buying something just because it looks cool. That’s why it helps to do some research before heading out shopping; if you know you can get an awesome pair of shoes at for $50 at a shoe store instead of dropping $100 at another store, chances are good that you won’t even consider going into the second store. 

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2) Think before you borrow

A lot of credit card companies are willing to give you more credit, even when you’re already maxed out. But adding more debt to your balance will only make matters worse in terms of your finances and your stress levels. It’s smart to avoid taking on any new debts before paying off old ones. Before you sign up for a new loan or apply for a credit card, take some time to think about how much money you really need versus how much you want. If it turns out that what you really need is less than what a creditor is offering, just say no!

3) Keep enough savings to get through emergencies

When you’re trying to get out of debt, build a solid emergency fund with 3-6 months worth of expenses. This will protect you from any sudden expenses that might happen, so you don’t find yourself borrowing again and digging your hole deeper. If you have credit card debt, start by paying off those balances first. The interest rates on credit cards are much higher than other loans or lines of credit, making them harder to pay off over time. Once they’re paid off, use your monthly payments to tackle other debts such as student loans or car loans.

4) Make ends meet before you spend on extras

There are lots of stories out there about people who charge too much and end up deep in debt. Instead, focus on finding a way to meet your basic expenses, including rent or mortgage payments, utility bills and food costs. If you have extra money at the end of each month after meeting those obligations, then you can start thinking about a little spending on non-essentials.

5) Live within your means

It sounds simple, but one of the easiest ways to get out of debt is to avoid getting into it in the first place. If you always live within your means, you’ll never have to worry about having debt collectors come after you and trying to take what little you do have. Live below your means, save whatever extra money you make, and don’t spend more than you can afford. Your finances will thank you for it.

6) Get rid of extra credit cards and loans

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When you have a lot of different credit cards and loans floating around, it can be tempting to go into more debt. Get rid of all but one card so that you’re not tempted by what your bank is offering. It’s also a good idea to consolidate your loans so that you only owe one creditor and can pay back a smaller amount each month. This is great because, consolidating reduces your number of monthly payments.

7) Budgeting will save you from overspending

Budgeting may not seem like an exciting use of your free time, but it can lead to great financial security. Keeping a monthly budget will help you figure out where your money is going, make you avoid overspending, and teach you how to live within your means. In the beginning, go slow: Managing a monthly budget is hard enough; the trick is sticking to it. this can be nearly impossible if you have three or more months worth of money being spread out in small amounts. 

Create a monthly budget and restrict your spending only to that month. Keep in mind that if a planned purchase comes up and puts you over-budget, wait until next month to buy it, or even save up to afford it. Rather than continuing to carry a balance on your credit card, pay it off. It’s a good idea to avoid carrying credit card balances at all costs, even if they offer a low introductory interest rate or cash back rewards program.

8) Cut costs by making your own things

Making your own things is usually much cheaper than buying them at a store. Why? You’re not paying for extra marketing, packaging, or shipping. Here are a few examples: If you want to be safe on a camping trip, make your own matches. It’s easy to do with household chemicals and paper (about 2 cents per match). Homemade whipped cream will taste better than store-bought (due to sugar content), and costs less too!

9) Save up for large purchases. Don’t charge them.

Start saving for major purchases like a car or house. This way, you’ll avoid being caught in an interest-based debt cycle where your costs are constantly increasing because you have to pay off one purchase with another. Learn to live within your means and put aside money before making a large purchase so that you don’t get yourself into trouble later on. 

Even if it seems impossible now, once you start putting money away each month it will become easier over time. You can also try avoiding any kind of credit card at all, credit cards often tempt people into spending more than they would otherwise be able to afford. Use cash instead: Not only does using cash make it easier to track how much you spend, but studies show that we spend less when we use cash rather than credit cards.

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