Falling into debt can be the cause of a lot of unwanted heartache and stress. However, there are steps you can take to help you start reducing your debt or ensure you never fall into debt. Continue reading to find out more.
Learning how to budget your money is by no means easy but if you can master it and spend as little money as possible, you will more than likely reduce your chances of falling into debt.
When preparing a budget you should begin by writing down all your income for each month followed by all of your expenditure. Be sure to include utility bills, shopping, car insurance (if you have a car) and any other quarterly/annual payments such as TV licence.
Once you have this down you can work out how much money you will have left over each month. If you do not have any money leftover after deducting your expenses you should look into how you can reduce your outgoings – we will look at this in a bit more detail later on.
If you cannot get rid of it, you should at the very least stop taking it with you on every shopping trip. It’s common knowledge that with a credit card in hand you are more likely to build up debts as you can just put all purchases on it with relative ease.
The key here if you decide to keep it is to have self control and only use the card in emergency situations.
Many people have the mindset that they will have to pay their bills either way so they can leave them all to the very last day and be fine – no, you should not think like this.
By leaving them all to the last day, you risk forgetting about some of the bills and spending your hard earned money on other clothing/social activities etc which will result in you either having to borrow money from someone else or pay the bills with your credit card – both of which are bad as they put you in debt.
Spending that extra bit of time looking for a better deal especially those items that are a little more expensive can help you avoid getting into debt.
A good place to start is with utility bills. Price comparison websites like youswitch and which? Make it very easy to quickly find the best deals and rates going for any kind of utility. Use these to your advantage and start saving money.
When it comes to expensive appliances like washing machines and fridge freezer try to shop when sales are on and always look at multiple stores or online merchants for the same appliance and then pick the one which has the best deal going.
This does not just mean big bank loans but also any type of loan which allows you to pay back over time that most large purchases can come with these days.
Although these types of payment systems are convenient because you do not have to cough up large amounts of money up front you are still taking a risk and putting yourself in debt.
You should try to save up money and buy that appliance or vehicle outright.
This does not mean you should never treat yourself to anything nice ever but you should keep it to a limit.
A good way to manage this is pick a day once a week/month where you can go out with friends or treat yourself to a nice pair of jeans. The key is to discipline yourself so you do not do go over this limit.
If you find you do not have any debts at all and still have extra money coming in each month you should try and save that money in case of emergency situations.
Think of it as a ‘rainy day fund’. You do not know what will happen tomorrow so having extra money in place is always a good thing.
Looking further down the line if it turns out that you never have to spend that money you will have saved up a fair amount which you can use to invest into something or continue saving.
We are confident if you start to apply some of these tips into your daily lives you will notice reduced debt or no debt at all!