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How to Stay Out of Debt

By Ruth Racey
Published: Wednesday, October 28th, 2009

It is a lot easier to jump into credit traps than to stay away from them. Once you are caught in its web, it will be hard to free yourself from the excessive amounts to be paid. Therefore, try to check every move by controlling your finances to avoid this from happening. If in case you are already in debt, it is important to prevent yourself from doing the same mistakes again. Here are some tips on how you can stay out of debt. 

  1. Do not give in to temptation. Although having a credit card is very useful in cases of emergencies that cause unexpected expenses, it can also provide problems that will cause unnecessary expenses. One primary cause or reason for bad debt is compulsive buying. The problems that come with this will escalate if you have more than the number of credit cards that you can handle. If this is so, think of closing one or two of the accounts for your own good. It may not be easy, but it will help you stay out of debt.
  2. Make a Monthly Budget. You will not be happy when spending all your money in the first week of the month buying unnecessary or luxurious items, and then eventually find out that you no longer have enough cash to buy groceries even before the month ends. To make it worse, finding out you even incurred a number of debts! In order to avoid this scenario, plan ahead. By making a list of the things that are essentially needed, you can avoid superfluous expenses and gain an idea of how much money is to be spent and how much is going to be left.
  3. Put your extra money in a bank. You will never know when a savings account might come in handy. Think about this: You fall into an accident and you are rushed to the hospital, thus the fees for the medicines and for the doctor. At the moment this happened, you just spent all of your cash on groceries and car repairs. You can always resort to your credit card to avoid gaining debts, but by doing so you incur another form of debt. It would be much better if you have spare money stored in a bank. This will act as protection against bad debts. If in case you do not run into these kinds of emergencies that require expenses, you will be growing spare money because of the accumulating interest in the savings.

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