Getting into debt is easy, getting out of debt can be a bit more difficult. As lenders make borrowing so easy, many people take on this easy credit and soon find themselves in a financial mess. When you add in all of the other living expenses beyond the consumer debts people have such as mortgages or rent, auto loan, utilities, food, etc… it is no wonder some many people feel like they are drowning in debt. The important thing to realise is that you can take control of your finances and learn the tricks to staying out of debt. Below is a look at the top ten practical tips for staying out of debt.
1. Stop Using Your Credit Card
Studies suggest that consumers are likely to spend a bit more on each purchase when shopping with a credit card versus paying cash or using their debit card. Make a commitment to stop using these credit cards by cutting them up. If you choose to keep one credit card for emergencies, be sure to keep it out of your wallet so you will not be tempted to use it. If you are need in dire financial assistance, look for benefit loans provided by the government or non-profits before borrowing from a bank. These are typically low to no interest and have you in mind instead of profits.
2. Make Savings a Top Priority
The only way you are going to stay out of debt permanently is to make saving money a top priority. You should try to save at least 10 per cent of your pay each month. Put this money in a separate bank account that is not tied to your checking account. This money should only be used for emergencies, but will prevent the need to borrow money. To start your saving account visit http://www.bbt.com
3. Set a Household Budget
You also must create and maintain a household budget if you are going to stay out of debt. This will force you to track your spending habits and make sure that you are not spending too much money in certain areas. This will also hold you accountable to sticking to a set financial plan that you have developed.
4. Take on a Part-Time Job
If possible, try to get an addition part-time job, or look for other ways to generate additional money, such as making goods and selling them. This will bring more money into the home on a regular basis that can be used to cover additional expenses rather than taking out a loan.
5. Set Long and Short-Term Goals
Living without borrowing money does not mean that you still cannot purchase the things you want. It just means that you need to do a little planning to get them. Set a series of long and short-term financial goals for yourself and then device a plan to achieve those goals. For example, if you want to purchase new furniture for your home, instead of charging your credit card, set some money aside each month until you have enough to make the purchase.
6. Reduce Current Spending
You can reduce the need to borrow money, but have more money available to spend on a regular basis. With that being said, take a closer look at your household budget at look for ways to cut back on your current spending. You want to make reasonable changes to your spending habits that you know you can stick to.
7. Focus on Needs not Wants
Too many times, people spend their money on the things they want and then run out of money for the things they need. This type of spending often causes the need to borrow money in the first place. Instead, focus only on the things you really need first, such us housing, food, and transport. Then you can focus on the things you want, like a new television set.
8. Keep Your Car Longer
Many consumers have fallen into the trap of thinking they need to purchase a new car every few years. This can really up to your overall debt. Instead, stick with your older car and keep it in good shape being have it serviced often. If you have to purchase a car make sure it is a used car that you can pay for out of your savings.
9. Make a Commitment
Staying out of debt is not easy, especially when obtaining credit cards is so tempting and easy to do. If you really want to stay out of debt permanently, you must make a commitment to curb your spending. Without a real commitment from you, it will be nearly impossible to take the steps needed to stay out of debt.
10. Reduce Impulse Spending
Impulse shopping is very dangerous and can lead to financial troubles that force you to have to borrow money. Make a commitment to avoid impulse shopping altogether. Only go shopping with a list, keep your credit cards at home when you go shopping and make a commitment to give yourself a 24-hours timeframe before making any large purchase.
These tips will help you stay out of debt forever. While these tips may seem a bit restrictive at first, it will actually put more money back into your pockets in the long run. This will make it easier to manage your finances and get the things you want. This is because you will be spending your money more wisely and not paying added fees on interest payments each year.