This is a collaborative post
Getting into debt is an incredibly easy thing to do. All you need to do is spend a bit too much one month, borrow to make up the difference, and then repeat the process until you’re completely buried. This can have some incredibly devastating effects on your life, causing tension at home, stress, and even illness. Many people assume a debt-free life is one without excitement, but there are plenty of ways to protect your finances without sacrificing the fun. All it takes is some careful thought and planning. Here are seven things you should do to avoid getting into debt.
- Avoid Getting Credit Cards
Credit cards are a really useful tool, but only if they’re used wisely. You might think that getting a credit card is a good idea, as it can boost your credit rating and provide peace of mind, but, unless you’re going to be sensible with yours, you shouldn’t have one. Most people tend to get credit cards for the reasons above, only to use them to buy things they don’t actually need. If you think you might do this, then you should take the temptation away and avoid applying for one.
- Prepare For Sudden Expenses
Whether you like it or not, there’s always the chance that something could go wrong. Things break, and circumstances change, and, if you’re not prepared for this, then you’re going to have to borrow. Of course, you don’t want to do this, as it means putting yourself in debt, which is why you need to build up an emergency fund. Go through your budget and set aside a certain amount of money to put away every single month, until you’re covered for six months worth of expenses.
- Shop Around Before Borrowing
Unfortunately, until you have built up your savings, you could face a situation where you need to borrow money. If this happens, it’s important that you soften the financial blow as much as possible. You can do this by using a comparison site, like Credit Raters, to compare loans and find the best deal. Just remember that this should only be used as a last resort. There’s no point in putting yourself in debt if you have any other option.
- Pay Bills On Time
When you already have debt to pay off, you need to ensure that you pay your bills on time. If you don’t, you might end up facing charges and late payment fees, which will only put you further in debt. If you can’t make repayments on time, for one reason or another, then make sure that you contact your lender and tell them. If you explain your situation, they may hold off on charging you. Unfortunately, this won’t always work, but there’s no reason not to try.
- Figure Out A Budget
One of the main reasons why people get into debt is because they frequently overspend without even realising it. To avoid this, you need to go through your income and expenses and work out exactly how much you have to spend each month and what you can spend it on. Once you’ve paid your bills, assign a certain amount of money to other things, like clothing and entertainment. If you stick to this, you shouldn’t overspend, and won’t have to borrow to make up the difference.
- Spend Your Money Wisely
People spend their money on a range of different things, some necessary, some important, and others completely useless. If you want to avoid getting into debt, then you need to take a look at the things you’re buying and work out whether or not you really need them. It might be nice to have the latest technology, expensive clothes, and fancy meals, but if you have to borrow to get them, then they’re not worth it. You don’t have to live on bare-essentials, but you can cut back.
- Make Money Go Further
One of the best ways to avoid getting into debt is to ensure that you have enough money for everything you need to buy. This means making your income go as far as it possibly can. There are a number of ways to do this, including cutting back on non-essentials. You can also shop around before getting groceries and consider switching to generic brand products. You could even speak to your boss at work and ask about getting a raise or promotion.
No one wants to sit around worrying about debt, but this is what’s going to happen unless you take control. Hopefully, with the tips above, you’ll find it much easier to stay financially savvy and avoid getting yourself buried.