Tips For Staying Debt Free
Prepare a budget and stick to it:
Start out by listing all of your monthly income and all of your monthly expenses. If you are spending a fair amount more
than you are making you have a problem that has to be addressed - now. To keep yourself out of debt you have to analyze your spending habits and be
truthful about it. A quick budget will reveal how your hard-earned bucks are being used and whether it's time to change your
spending habits.
Make certain you know the costs involved prior to accepting debt:
While credit cards may be convenient, they're one of the most costly types of credit, as interest rates will be about 28 per cent for department store
cards and 18 or 19 per cent for others like Visa and Mastercard. But, many cards may be put to use with no costs to the user if they're paid off
completely prior to the due date. After that, you have to pay interest on the entire balance.
If you aren't able to pay your card back, just pay as much as you can and don't let yourself get caught in the trap of just paying the minimum due, the result is debt lasting much longer than need be and lots lost in interest.
Earn some savings and pay yourself first:
Start putting aside small sums for a possible rainy day. In North America the ordinary household is
only two paychecks away from financial ruin. Having some savings stashed away offers great peace of mind, and will eliminate the need
to take on credit hastily if there's troubled times.
Be careful about easy credit:
It wasn't too many years ago that credit was hard to get and people were required to make a case to get it. But now, individuals are bombarded with
easy-to-get credit cards, payday loans, and other methods to borrow cash. While possessing access to credit in the form of such things as credit
cards is good for cases of emergency, always remember that when used they must be repaid as quickly as possible to avoid significant extra costs
due to the interest.
Think through your purchasing decisions carefully prior to acting:
The more costly something is, the more thought you should give it. Take the cost of anything you wish to buy and weigh it against the need or use you
really have for it.
Try to pay all your bills in full and before their due date:
It's tough sometimes, but paying bills in full and before the due date saves you money in late fees, helps you remain
out of debt, and looks fantastic on your credit history. If you aren't able to pay off all of your bills, be proactive and do 'damage control.' Try
to pay off some of the smaller bills in full and then make contact with the remaining agencies and explain that as a result of circumstances you cannot
pay them in full, but will pay what you can (assure them that you plan to pay in full as soon as possible). Remember, don't ignore those bills
that you can't afford at the moment because the debt will wind up with a collection agency, which will do everything it takes to get the money, including
damaging your credit rating.
