How to avoid getting in debt

Debt is one of those words that strikes fear in just about everyone. It is definitely something that everyone wants to avoid at all cost. Nothing is worse than seeing the debt continually pile up month over month and feeling like it’s impossible to get out. That is why it’s best to avoid getting into debt in the first place.

Follow some of these tips to have a better chance of staying above water.

Tips to avoid getting in debt

1. Create a budget

The first tip in making sure not to get in debt is to simply create a budget. If you are able to write down everything that you spend your money on per month, then you should have no problems in figuring out how much money you need to pay all of that off. You should also make sure that you will have some money left over each month just in case of an extra expense that you do not see coming.

2. Use a debit card or cash

By only using your debit card or cash, you will avoid trapping yourself in the problem of buying something that you cannot afford. If you do not have enough money in cash or in your checking account, then you should not be purchasing that item. Do not spend money that you do not have.

3. Avoid impulsive buying

Another tip in making sure that you stay out of debt is to simply avoid impulsive buying. If you see a really cool television set, then you should go home and think about it for a week before making the purchase. Even if you do have the money, you may find out that you don’t even like it that much after thinking about it for a week. Most impulsive buyers pay for items that they cannot afford, and that is what leads to their debt troubles.

4. Savings account

You should also make sure that you put a certain percentage of your income each month into your savings account. This may make your budget even tighter, but it is extremely important that you have some more money stashed away in case of an emergency. You never know what will happen, and you want to make sure that you have enough money laying around where you won’t have to worry about it.

Conclusion

Debt is an experience that no one wants to go through; it can feel like you are constantly below water trying to breathe for air. The most important thing you can do is create a monthly budget and make sure to save money constantly. If you use all of these tips effectively, then you should be fine.

About the author

David Spader is a freelance blogger who usually writes about saving accounts over at SavingsAccount.org. His recent review looked at where to get the highest CD rates.