40 Tips To Avoid (And Manage) Being In Debt

40 Tips To Avoid (And Manage) Being In Debt - debt prison image

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If you find yourself in debt, or are heading in that direction – it’s not a nice feeling. The stress of debt can have a huge impact on your daily life and how you live it.

Luckily, there are plenty of tips that you can add to your lifestyle that will prevent this from happening. Some may be better suited to you than others, so have a read through and see what works best for you.

  1. Use cash for all your purchases instead of your credit card. Leave that to pay for your house and your car.
  2. When you get paid every month, put away 60% of your earnings into a savings account, and keep the 40% to do with what you wish.
  3. Make a proper spreadsheet with all your monthly payments including your bills, grocery shopping, interest amounts, etc., and make a total of all your balance. Then you can see exactly what you owe, what you have, and what you need.

Update it every month as you start paying off more and more.

  1. Every time you get a little extra money coming in, put it into your emergency fund so you can use it to pay off debt.
  2. Speak to a credit counselor and look at websites like DebtSolutionsReviewed’s review for more information and advice. You may learn how to make a plan of action (and stick to it!)
  3. Don’t use your credit card to get through the next month’s paycheck. If you do this, you will just get further into debt.
  4. Don’t pay off too much of your debt at one time. Make sure that you still have enough for your weekly expenses without starving yourself.
  5. Don’t eat out in fancy restaurants, or order takeout. Cook your own meals with the food that’s in your cupboards, fridge, and freezer.
  6. If you’re bored, invite friends over or go to their house and entertain yourself that way. You don’t have to splash the cash on nights out to have fun.
  7. Don’t ever use your emergency account to pay off your credit cards – that defeats the whole point of having one. – Pretend like it’s not there.

 

  1. If you know you have expenses coming up in the near future, make a note of them on a calendar so you won’t be surprised when you need to pay for them.
  2. Give yourself a budget to live off every week. Try your best at paying the absolute minimum on everything you purchase, like the brand of chips you by – get the stores own instead.
  3. If you’re living with your other half, make sure you’re both on the same page when it comes to money.
  4. If you know you have bad spending habits, find a way to manage them. Don’t go cold turkey – that will most likely make you splurge even harder. Instead, give yourself a limit.
  5. Stay focused, no one said it was going to be easy. Paying off debt is very stressful, especially when you realize it isn’t going to happen overnight. But as long as you know that it won’t last forever, and pay attention to the number going down – you will get through it.

 

  1. Stop it! If you find a good enough excuse to buy the new iPhone, even if the phone you have now works perfectly fine, and you’re $30,000 in debt – question what your goal really is.
  2. If one technique isn’t working for you, don’t use that as an excuse to give up – find a new technique! There are so many out there.
  3. Change your behavior and attitude if you know that it is the thing causing you to overspend. One way to do this is to distract yourself by something other than spending – like playing music or working out.
  4. If you’ve been in debt for the last three years, be realistic when it comes to paying it all off. It will most likely take you longer than three years to pay it all back.
  5. Although you need to budget your lifestyle, it is still important to have a social life and get out of the house once in a while to decompress a little. You don’t want to end up not enjoying life just because of your financial situation.
  6. What is necessary? Do you need the sports channel? Do you need all that data on your cell phone? Do you have to buy the expensive brand of ice cream?

If it’s not a necessity – get rid of it for now. You’re just wasting precious money.

  1. Get creative when it comes to doing things around the house and in your personal life. If you feel like you need some new clothes for the summer for example, don’t go out and buy a new wardrobe, instead find creative ways to cut up and sew your clothes, turning them into something awesome.
  2. Don’t keep borrowing money – that’s how you got in this situation to begin with. Stop the credit cards, stop the car loans, stop the home equity lines, and so on. If you know you can’t afford something with the cash that you have in your wallet – you can’t afford it at all.
  3. If there’s something that you really want, save up the money like everyone has to do, and when you have it, buy it with cash. By the time you have actually saved up for what you wanted, it will feel so much more gratifying when you buy it. Or, you may not even want it anymore.
  4. Use an app or download a software specifically designed to track your spendings, and split everything up into different categories. Not only is this efficient, but it will make it easier to see where your problem areas are.
  5. Give yourself some wiggle room, as you never know what life is going to throw at you. Always be prepared for the minor setbacks.
  6. Unsubscribe from all the alerts and notifications you get sent about your favorite online stores. They will only persuade you to pay for things you don’t need – all while making you think it’s okay because it’s on offer. – Don’t fall for it.

 

  1. Downsize where you’re living. If it’s bigger than what you need, you may be paying more than you should, so move into somewhere smaller.
  2. Figure out what drives you to save up. This may be your children or your passion. Whatever it may be, think about that whenever times get hard to remind yourself of why you’re doing this.
  3. If you know you have a raise coming up, make a note of it and use all of the extra earnings to pay off your debt.
  4. Don’t see money as something that is for spending. For example, if you plan to buy a brand new flat screen tv, calculate how many hours it took you to work for the amount of money it is. You may realize that a tv isn’t worth all of that hard work you’ve been doing over the last few weeks.
  5. Learn about the alternatives instead of assuming that we have to pay the asking price – 90% of the time, it’s not the only option you have. Get a second-hand oven, shop at charity shops and cycle to work.
  6. Figure out whether you’re buying things because you actually need them, or if you’re just paying for them because everyone else is.
  7. Don’t think about your debt – think about your wealth. Don’t tell yourself you are trying to get out of debt. Instead, think of it as your current financial situation that is contributing to your overall wealth. Now you’ll see it as a positive, rather than a negative.
  8. Start by paying off the smallest debt first, that way you get the ball rolling, and it may be the ‘pick me up’ you need to show you that it is possible to do it.

 

  1. Understand that you will have to make sacrifices if you want to pay your debt off – it’s just part of the game. As long as you’re willing to do so, you will get through it.
  2. Write yourself a note that says “DO I ABSOLUTELY NEEEEED THIS???!!!!! And stick it in your wallet next to your cash.
  3. Get supermarket fliers with all the offers on, and use that to plan your weekly grocery shop. Look at all the things that are on promotion, and use them to make your meals.
  4. Plant seeds in your garden and use them to grow your own tomatoes, peas, potatoes, herbs and more. You will, in time, be able to use what you have to live a sustainable life. If you don’t have a garden, you can keep some pots by your windowsill in the kitchen.
  5. Just think about the feeling you will get when you have paid everything off. – Freedom! Just imagine it.

 

So as you can see, there are tons of tips and tricks to avoid, (or manage) being in debt. Put as many in use as you can, and see what works best for you. Keep trying until you find your ‘way’.

Getting Over Credit, Debt, And Other Horror Stories

When people think of credit and debt, their minds immediately go to the worse case scenarios of them. We’ve all heard ghost stories of how bad credit can drag you down and limit your options and how debt can become a spiral that can truly be very hard to climb out of. But the problem is that a lot of people focus on the negative consequences of these stories that they fail to consider just how helpful credit and debt can be. Here, we’re going to challenge the phobia and help you use credit and debt better.

Getting Over Credit, Debt, And Other Horror Stories - credit card image

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The sooner you come face-to-face with it, the better

There’s a significant portion of adults who have never once checked their credit report. Some of these people might not know to, others have chosen not to because they’re staying well away from credit as much as possible. However, even if your record is immaculate, your report might not be. You might have to repair your credit score by no fault of your own but because there are erroneous accounts on them. For instance, you might be getting bad reports based on accounts that are mistakenly tied to your name but aren’t yours. Or you might be up-to-date with all your payments but your creditors made a mistake in reporting that you missed a payment.

It’s the next step in a better financial life

When used responsibly, credit and debt are the steps you take to make some of the biggest financial decisions in your life. When you get a car, when you buy a house, when you start a business, the chances are you take out a loan for them. With better credit, which is built by taking debts responsibly, you have the chance to get the best discount auto loans and the best mortgages. Having no history of credit isn’t going to help you get better deals. You have no history of being a responsible debtor, after all. Only by building a healthy credit history can you get the best deals.

Credit cards aren’t the devil

Those pieces of plastic might be considered the single most dangerous aspect of credit. Yes, people get themselves into credit card debt they can’t handle by using it to make lifestyle purchases they otherwise couldn’t. But that debt can be used positively to build up your credit so long as you have pre-planned a budget to always keep on top of it. Debt management turns debt from a danger into a simple part of life. You can get rewards cards that turn credit card use into extra purchasing power, whether it’s through air miles or through grocery vouchers.

Wise use of credit and responsibility for debts can be one of the most effective financial tools at your disposal. It can improve your purchasing power and it can help you make some of the biggest financial decisions in your life. In any account, it’s important to come face-to-face with it so you make sure that it’s not marred by errors that could come back to haunt you.

Uncovering The Links Between Poor Health & Debt

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The vast majority of people out there have some form of debt. It might be a home loan, for example, a credit card, or maybe just a monthly prescription you pay for services received. But, whereas debt seems to be entirely normal these days, bad debts are a huge issue – not just to people’s finances, but also to their health and wellbeing. And if you are looking for reasons to teach your kids about the importance of sound financial knowledge, the fact that bad debts will harm them in the future should be all you need to start educating them right now. Let’s take a look at some of the links between bad debts and poor health – and see how we can all make sure our children never suffer from either.

High blood pressure levels

Having bad debts means that your lenders will, to all intents and purposes, be after you. Phone calls, letters, emails – your creditors will be trying their damnedest to get their money back by almost any means necessary. Unsurprisingly, this can lead to stressful health issues such as high blood pressure. A study in Norway found that adults with high debt-to-asset ratios suffered from higher blood pressure than others, and also suffered from poor health in many other areas. And it’s also important to note that those adults studied were in their prime, too; between the ages of 24-32. It’s important to bear this in mind for your children, as it could only be a decade or so before bad debts could start impacting their lives – and blood pressure. Don’t’ forget, developing a higher blood pressure means people will be more at risk of heart attack or stroke – it’s that serious.

Lowers immunity

Chronic stress doesn’t just affect your blood pressure – most researchers and scientists understand that stress can also suppress your immune system. So, the more down the dangerous debt spiral you go, the more your blood pressure rises, and more at risk your body will be to general illnesses. Being in debt also has a tendency to keep you awake at night with worry so you won’t be sleeping well. And, as every doctor will tell you, sleep is vital for giving your body a chance to recover and recuperate, as well as fighting off any infections.

Feelings of anxiety

It’s not much of a surprise to hear that the more debt you are in, the more anxious you will become. Anxiety is a symptom of stress, and owing a lot of money is obviously an incredibly stressful experience. Feelings of anxiety can seep into all kinds of different areas in your life. You might struggle to be sociable, for example, and withdraw from your friends and family networks. It can impact on your productivity at work, too – meaning you are more likely to have to take time off or maybe even lose your job. And anxiety is also an indicator of high blood pressure, which, as we mentioned above, can lead to heart problems and stroke.

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Depression

When you owe a lot of money and can’t afford to pay it back, you tend to feel helpless. And the impact of those feelings can be dramatic on your psychological makeup. Unhappiness can quickly lead to depression, and the feeling for many people in debt is that they are underwater and incapable of helping themselves, which exacerbates those depressive feelings even further. And while many people discount depression as not a serious issue, the simple fact is that it has a terrible impact on people and those that love them. Families can break up, people can lose their jobs and find themselves unable to work, which increases the debt spiral further. As a parent, one of the worst things you can face is your beloved child developing depression, and feeling like there is nothing you can do to help them.

Doctor’s visits

When you owe a lot of money, some things in life that you deem unnecessary will often take a hit. That might mean paying fewer visits to your doctor, even when you are sick. There is a direct link between those who have high levels of credit card and medical debt and those who are less likely to visit their doctor for regular checkups. And the simple truth is that when you tie in the many health problems debt can cause and fail to see a doctor, there is more chance of serious issues arising.

Severe injuries

You can be leading a perfectly sensible lifestyle one minute. But a serious injury or accident can change everything in a single moment. Not only will you have to consider quitting your job, but you might also have to find tens of thousands – possibly hundreds – to pay for medical care. Health insurance can help, of course, as can finding a personal injury lawyer to claim for compensation. But there are no guarantees that your insurance company will pay out, or that you will win your case. The reality for many people who suffer serious injuries is that their finances will take a hit, their lifestyle opportunities will dramatically reduce, while their debt levels will increase. You can’t teach your child to avoid accidents, of course. But you can teach them how to prepare for the worst.

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Aches and pains

Nasty letters from debt collectors and angry lenders can even lead to you developing physical symptoms such as headaches, pains, and muscular tensions. In fact, researchers have found almost one in every two of those who were in bad debt also reported frequent migraines, headaches, and digestive problems. So, if you want your child to grow up physically healthy, it’s worth teaching them the benefits of financial security.

Eating habits

When you are in the midst of a severe debt problem, it’s not unusual to stop being mindful of what you are eating. Stress levels can keep your hunger at bay, and when you eventually crash, you will often reach out for quick fixes such as sugary snacks and fast food. And make no mistake about it, when you are eating too much garbage, it is going to have a grave impact on your body’s ability to fight other issues. Your stress levels will rise, too, as you aren’t getting enough nutrients, and feelings of depression are also likely to follow because you end up not taking care of yourself. Again, it’s being in debt that can lock you into a vicious cycle of ailments that can lead to others – and increases the damage they cause.

Exercise

As surprising as it might be to hear, research suggests that more than sixty percent of people with bad debts don’t take enough exercise every week. While the reasons for the link are not clear, it is an alarming statistic, given that exercise is part of the key to a healthy and long-lasting life. Exercise releases endorphins in the brain, which can protect you against depression and stress, both of which can arise due to having bad debts. For parents with growing children, it’s important to realise the positive impacts of exercise on their futures. And it’s also vital to understand that if they do have bad debts, it might even protect them against some of the many health issues that being in debt can cause.

As you can see, there is a broad range of links between poor health and bad debts. The pressures and strains of being in debt can take a toll on anyone’ s mind and body – and it’s something you need to prepare your children for in the future.

Mind Over Money: Taking Control of Your Finances

Mind Over Money: Taking Control of Your Finances - jar of coins image

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Money isn’t everything in life, and it’s of course possible to be happy and fulfilled without a ton of it in the bank. However, it is still important. Money is what keeps a roof over your head, and food in your stomach. It’s what allows you to get around, and buy the things you need. Therefore, being able to effectively manage what you have (whether it’s a little or a lot) is one of the most important skills to have as an adult. If you know you’re not great with money or are beginning to struggle, here are a few simple tips to help you regain that control.

Create Budget

The first step to taking control of your finances is to know exactly what you’re spending. It’s so easy to buy a magazine here, a coffee there, spend a few dollars on lunch one day. But all these little purchases add up, and if you’re not careful are what will cause you to overspend. Start by working out your expenditures: exactly how much you have coming in and then what goes out. What each of your monthly bills, rent, groceries and everything else costs. That way, anything leftover is what you have to play with and only that. Ideally, you will have a bills bank account where all of the money for essentials is transferred as soon as you’re paid. That way your expendable income is completely separate, it never gets dipped into at all.

Reduce Your Outgoings

Once you know exactly what you’re spending on bills, you can take steps to reduce them if needed. A huge tv and internet package for example might take up a huge part of your budget. Do you really need this? Could you drop it down to a smaller package or even cancel it completely? With inexpensive streaming services like Netflix, you won’t be short on things to watch and could save yourself a huge lump of money each month. Could you be more careful with your gas and electricity usage to reduce your fuel bills? One area where most families overspend is with groceries. If you create a store cupboard with plenty of dry ingredients and seasonings, you can prepare healthy meals for far less than buying everything fresh. For example, wholemeal pasta, rice, couscous, quinoa and other healthy grains pair perfectly with a homemade sauce using canned vegetables, herbs, and spices, Add a little meat from the freezer, and you have a healthy and balanced means during leaner times with money. Making a shopping list before setting out is another way that you will save money since you’ll have a set plan and won’t be as tempted by impulse or unnecessary purchases.

Get a Handle on Debt

Borrowing money can sometimes be useful. It allows us to study or buy houses and cars that we’d never be able to afford outright. But it can also cause a lot of problems too. When you take out loans, credit cards, and store cards for example, it’s easy to live ‘beyond you means’ and end up overcommitted. Before you know it, you might be in a situation where each month you only have enough to cover the interest meaning no money is being taken off the debt, and it doesn’t go down. Speak to a debt charity if you’re in trouble, they will offer you invaluable and non-judgemental advice. If your debt is a student loan, it could be worth looking into Obama student loan forgiveness and seeing if you qualify.

Save For Unexpected Bills

Unfortunately, life has a way of throwing a curveball every now and again. Things are going fine one minute, and the next it’s all going wrong. An unexpected bill drops on your doormat, your car breaks down or your washing machine packs up. This can spell disaster if you’re not prepared. Having a savings account that’s for these kinds of problems can give you a buffer and make life so much easier. Rather than borrowing money, you can sort problems right away and not get into any further trouble.

Unlock The Door To Financial Freedom

Adult life will often take people by surprise. Most don’t expect to be thrown into a world of bills, debts, and other money problems. But, the world of finance is a cruel one. And, it doesn’t treat anyone kindly. This makes it extremely important to be prepared for unexpected issues and have the knowledge to set them right. Once you achieve this goal, you will reach a new level of financial freedom that you’ve yet to experience. To help you out, this post will be going through several areas of finance that every adult should consider. And, some ways that can be used to improve your current situation.

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  • Savings

The path to financial freedom starts by spending as little money as possible. Most people will get through a large chunk of their pay within the first few days of getting it. When you have money in the bank, it can be easy to feel like you don’t have to be careful. This will often lead to impulse buying, which isn’t good for anyone. So, when you first start budgeting; it’s important only to spend the money that you absolutely have to. If this means missing out on some luxuries for a while; that’s alright. You can use these items as motivation to get you through the saving. Thinking about what you miss will make it easier to drive yourself to success. The money that you save from this should be put away safely, though.

The money that you save won’t be much use while it’s sat in your account. And, you might find it hard to save without a goal to reach. It’s best to try and save enough money to cover at least three months of living. This will give you more than enough money to resolve most issues before they impact your life. And, this gives you a reasonable goal to reach. This money should be kept in an account that is designed to make a large amount of interest. Most banks will offer small savings accounts, which allow you to have access to your money instantly. These are perfect for most.

  • Debt

Some people will find that their issues are more than just a lack of money. A lot of people have debt to deal with. But, this sort of issue can be very hard to deal with. Thankfully, if you’ve followed the first step to save and put your money away; you’re already on track to start paying off your debt. If you can; you should aim to save alongside repayments. This will mean that you’re making progress in both areas. And, will help you to reach your goals faster, too. A lot of companies that offer loans will also offer you the chance to rework your repayments; if they’re too hard to make. This gives you the chance to get some help with your loan.

Throughout this stage, you have to be very attentive. It’s easy for money to disappear without a trace when you’re not watching it carefully. Money gets spent; then, you will forget about it. And, soon enough, this could make it impossible to pay back your loans. There are loads of tools that can be used to help you to monitor your money. Systems like Quickbooks give you a great chance to get control of your money. And, they’re not expensive to use. Along with this, it’s important to learn when is best to take a loan. A lot of people find themselves in a bad situation with debt because they have to get a loan in an emergency situation.

But, this nearly never has to be the case. If you monitor your money all the time; it will be hard for future issues to slip through the net. You will have a good idea of when you will need the money. Using this sort of practice will help you to predict how much money you will need long into the future. Instead of having to rely on getting money quickly and paying high-rates multiple times; you could get a larger loan to cover everything. Or, if you can see that your current debts are getting to a low enough level; you could consolidate them all into a bigger loan. Having your debts in one big loan will usually mean that you’re paying a lot less interest back. You will only ever have to pay money to one place. And, you will have the chance to spread the loan over a longer and more reasonable period. These are all great benefits to those in debt.

  • Income/Outgoings

There are other considerations that have to be made; when you’re working on your money. A lot of people don’t earn as much as they should for the work that they do. Thankfully, this is easy to check, too. Most countries will have resources available to help you find the average rate of pay for your position. If you’re paid less; you could talk to your employer about a raise. This might not work, though. In this case, it could be worth having a look at some similar jobs. You may find that you can get a very similar job in the area, with higher pay. This could make life much easier for you when it comes to sorting out your money.

To further help with your financial situation, you could also look into some other ways to make some money. Most people have skills or interests that can be translated into income. For example, you might really enjoy playing musical instruments and have the right skill level to teach them. In most places, you don’t need any specific licenses to sell this sort of trade. So, you’d be able to do it freely and easily. When looking for chances like this, it’s best to do loads of research. Most people will ignore most of the options in front of them. But, to get the best chance at making money; you have to take advantage of everything you can.

Sorting out your financial situation won’t be easy. But, likewise, living without enough money all the time will be very challenging. You have to consider which of these lives you’d prefer to lead. If you make a difference now; you’re much more likely to have a comfortable future. If you don’t, though; you’ll be happier now. But, life could get very hard later on.