It’s is super easy to get into debt. Life is chaotic and when someone is throwing around what appears to be ‘free money’. If you need (or really want) something hard enough, you can get the financing for it.
There are a number of Americans who stuck to their guns, followed intense programs, and got out of debt once and for all. The problem is, do they stay debt-free, or do they see themselves as having done it once, they can do it again?
It’s a truly liberating feeling to get out of debt, but a little less than half of the country spend more money than they have. A lot of it has to do with the cost of everything going up and wages staying low. If we can’t afford healthcare or to save money, then it’s quite easy to find ourselves pulling out the plastic to afford everyday costs.
In order to stop yourself from getting behind on payments, you have to be proactive with your spending. If you can’t afford something, don’t buy it. In the end, what is the point of eventually paying A LOT more money for something down the road just so you can have it today?
Here’s what you need to do in order to protect yourself.
1) Have a Savings Account
This might sound simple, but most Americans don’t have one! They don’t have one for emergencies, for saving up for vacation, or to pay for things down the line they might need or want. If they had such an account, it would save them wasting extra thousands of dollars down the line to pay for things.
If you have an unexpected bill, you have our emergency savings. If you decide to buy a house and need a down-payment, you have savings. If you break your arm and are out of work for a few weeks, you have savings. It’s better to save money now rather than something big happening later and having nothing at all.
2) Use Cash
This is a big one. Use cash to buy things. When you budget your money, stick the cash in an envelop to prevent overspending. For example, if you set aside $150 for groceries, put that amount of cash aside. When you go to the store, you won’t be tempted to overspend thinking you can just pull out the plastic.
If you want to prevent credit card debt, get rid of the credit cards.
3) Budget, Budget, Budget
This goes with point two, but staying strict means keeping on a budget. Know what you want to spend on things and keep it at that level. By budgeting everything, you will have a better chance at saving money to go into your emergency savings fun by not overspending.
It’s also easy to incur late payment or overdraft charges. If must have a credit card for when times are tough, don’t leave your balance hanging. Pay it off as soon as you can.
If you were able to overcome debt in the first place, these tips and strategies are things you already know work. It’s important to keep up with them to keep your financial freedom. Saving money will always be the preferred way to go over piling on more debt and getting deep once again.
