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It’s very easy to spend money than it is to save it and it will come as no surprise that many of us are likely or have already been in debt at least once in our lifetime. That could be anything from a few hundred dollars to thousands. Here are some important tips on how to avoid getting into debt yourself.
Don’t Spend Beyond Your Means
It’s a simple thing, but a lot of us tend to break this rule. Spending beyond your means is defined by spending more money than you actually have. This is how and why you end up getting into debt, and it’s not a good lifestyle to live, especially if you’re responsible or supporting other members in your household. Try to focus on what you do have available and give yourself the challenge of saying no to things that will leave you in the negative. It’s all about being careful with your money and that when you’re in debt, it’s not money that’s yours to spend.
Budget Like A Pro
Budgeting helps with saving money because it makes you aware of how much you have to spend and what’s remaining from the amount you have to pay regardless of each month. Without a budget, it’s easier to spend haphazardly. Set out your budget on an excel spreadsheet and note down everything you pay for currently per month. Estimate from previous months how much you usually spend outside of your regular payments and look at where you can cut down. The longer this budget is in place, the easier it will become to make it a habit and then you can push yourself to save more and spend less as the months go by and you get used to living with a certain amount.
Curb Credit Card Spending
Spending beyond your means will often include going into a bank overdraft and using your credit card to make payments. Your credit card acts just like another form of overdraft, so never set your credit card limit to more than what you need.
It should never really be more than your wages per month and if it is currently it’s best to reduce it. Try to avoid using your credit card at all unless it’s for a big expenditure or something you can’t afford to pay off in one go.
Credit cards are for emergencies only, so remind yourself of this every time you try and spend something on your credit card.
Have An Emergency Fund
You should always be saving some money from your paycheck every month. This is because an emergency fund will always come in handy for when you need it the most. You should set up an emergency fund when you start working, and you put so much in each month directly. See it as a regular payment just like a mortgage payment or utility bill.
With these tips, you’ll make it less likely to ever get into debt again.
This is a collaborative post*