The 9 Strategies to help you stay out of debt for good! Provides a simple guide to help you understand credit and debt.
It features the following subtopics: What is debt? The strategies of staying out of debt, How much debt is too much?, Living within your means, Tips for managing debts or credit cards and digging your way out of debt, and How to get out of debt and live debt-free.
What is Debt?
Debt is anything owed to someone or an organization. Anytime you borrow money or goods from another, you owe a debt and you have an obligation to return the goods or repay the fund, usually with interest.
No matter your age, you can learn how to stay out of debt. Although it is difficult and time-consuming to pay off your debts, there are ways to do it faster and with less hassle.
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9 Strategies to Help You Stay out of Debt For Good!
The key is knowing the best strategies for managing your debt and making sure your budget is aligned with that goal. It is just one of those things that happens without your notice, or may even feel as if it’s out of your control.
However, staying out of debt is possible. Follow these strategies to avoid falling into a hole of debt.
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1. If you can’t afford it, don’t buy it.
Most people, because of a lack of proper planning, buy things they can’t afford by taking out a loan or a credit card advance. One of the most dangerous reasons to take out a loan or a credit card cash advance is financing what they can’t afford with their monthly income to live bug.
Doing this makes you live under the illusion that you can afford things you actually do not have the money to afford. To stay out of debt completely, you need to live with the notion that if you can’t afford it, don’t buy it and if you can’t afford something in cash, then you can’t pay for it with a credit card.
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2. Have a fallback emergency money
Emergency funds are very crucial for unplanned situations. It would be at your best to establish an emergency saving which includes 4-month of your salary saved up. This will take care of your expenses if you get laid off from your job, develop an illness that prevents you from working, or need money for unexpected emergencies.
3. Pay off your credit card outstanding in full.
Paying your credit balances as you go will keep your spending under control. Full payment for all credit card advances would save you a lot of stress in the future.
4. Focus on your needs, not your wants
Focusing on your needs, not your wants, is one of the 9 strategies to help you stay out of debt for good! There is always room in your budget and scale of preference to cut out unnecessary spending habits. This would include cutting down on your online shopping, clubbing, visiting exotic restaurants, and so on. Therefore, the more you cut down on your wants and spend only on your needs, the better your finances.
5. Make a Budget for Everything
By budgeting your weekly or monthly expenses, you can track your spending and give you leverage to buy where you can afford it. Every month, bring out the mapped amount you planned and put it in your savings.
Then know how much extra you have left to spend on your needs and not wants. This helps you know exactly what to cut down on. You can make use of some of the online tools to help you with the budgeting processes.
6. Do not use your credit card for cash advances
Getting a cash advance with your credit card means you are abusing your finances and need to look into it urgently. Not only will you be charged a high APR, but you will likely also be charged a cash advance fee, plus other legal fees.
7. Limit the number of cards you currently use or have
Limiting the number of cards you currently have is one of the 9 strategies to help you stay out of debt for good! Multiple cards mean double payments and multiple interests. If you can’t use the cards responsibly, you might eventually need debt consolidation. The more the charges accumulate, the more you lose track of your spending.
8. Keep a sheet for all your expenses.
Keep a sheet or record all your sheets in a Google sheet and update it on a monthly basis. That way, you can make full payments on all your cards at the right time.
9. If your pay/income increases, do not increase your expenses
If your pay increases, live within the lower wage than you had before and save the extra fund. After all, you have managed to live better with your previous wage. You can even invest this money, but invest wisely.
Living Within Your Means and What you need to know about Digging out of Debt
There are so many ways to get yourself into debt. Whether you own a home or not, dealing with bills and debts is a normal, everyday struggle. Whether you are in your first year of college or preparing to retire, it seems like everyone at some point in time needs help to deal with their finances.
Luckily, there are plenty of resources available that can show you the best ways to get out of debt and stay out of debt for good.
Importance of staying out of debt
Are you drowning in debt? Paying off your debts doesn’t have to be difficult. There are benefits of staying out of debt and they are:
- Debt can water all your efforts down and drain your cash
- If you are free of debt, chances are you will have more money to spend on things you need and want
- Staying out of debt makes you enjoy life without having to worry about anything
- Staying out of debt also helps you not to worry about interest payments.
- It helps keeps you in the good book
- Staying out of debt gives you good credit history.
Tips for Staying Out of Debt
By following these tips, you will keep your money where it belongs in your pocket.
Consider taking one or more of the following steps to help pay off debt or stay out of debt:
- Manage your income wisely and spend on your need
- Manage your debt with care to avoid it escalating
- Talk to a debt management officers, they can help out in cases like this
- Consider consolidating your student loans if you have large loans
- Stop taking high-interest rate loans
- Use cards with a low-interest rate
- Consolidate your credit card loan if possible by all means
- Cut out all the cards that bring you debt cos you don’t need them
- Consider using your savings to pay off your debts
- Do not mishandle debts because it can lead to bad credit history.
Digging Your Way out of Debt
It is easy to get into debt. But that does not mean it’s easy to stay out of debt. Most people slide back repeatedly, even when they try their hardest not to. Your creditors don’t care about your plans or intentions; all they want is the money you owe them.
This can be frustrating and disheartening, but you have options if you will make some changes in order to keep your hard-earned money where it belongs in your pocket, where it belongs.
How Much Debt is too much
How much debt is too much? It is recommended you keep your debt-to-income ratio below or less than 43%. Anything high can cause problems for you and make it difficult to pay back and get out of such debt.
Conclusion
If you are falling into debt, it is important to talk to an expert and stay out of it. This article has given your money tips and debt management solutions that can help you stop falling into the holes and start digging yourself out.
