If you're worried about falling into debt, there are simple steps you can take to avoid debt. These steps to avoid debt are easy to follow because they are common-sense strategies that will likely save you money in the long run.
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Create a budget. Write down your expenses and income and find ways to reduce costs. Dining at home and subscribing to films online can be more profitable than going to a restaurant and the cinema. By making a budget, you can better track how much money is being spent and on what expenses.
Consider working part time. Even if you don't have an immediate need for money, if you have the time and ability to work part-time, you can save that money to start an emergency fund to avoid debt when an emergency arrives.
Save. Even if it is an exchange of coins, those cents, even though they are coins, will add up. If you save with a goal in mind, you may exceed the dollar amount you set for a vacation or other reward.
Don't use your retirement funds. Just don't do it. The reason they are called your retirement savings is that they are just for your retirement. When the time comes for you to stop working, you don't want to go into debt to finance your golden years.
Limit the number of credit cards you have. If you already have a large number of active credit cards, don't close them, simply stop using them. Pay them off and keep them in a safe place where you won't be tempted to carry them with you. Savers have done everything from cutting them off (without canceling them – doing so will negatively affect your credit score), filling freezer bags with water, and literally putting those credit cards on ice.
Do it yourself whenever possible. Think about all the services and products you pay for – can you do it? There's a DIY website, magazine, or instructional video for anything and everything. You can find inspiration, tips and tricks on sites like Pinterest and YouTube. Learn how to do your own home repairs, fix your car, and make your own cleaning supplies, gifts, home decorations, and more! This helps you avoid debt while learning valuable life skills.
Limit your housing expenses. If you are looking to buy a new home, don't be tempted to buy a larger home than you need. The same goes for an apartment. Ask yourself if you really need to live in a luxury rental community or if you need a four-car garage and in-ground pool. Also, remember that with the price of the house or apartment, you also need to be able to afford the necessary insurance for either of them. Plus, if you're looking at a new home with a pool and yard, there's the cost of maintenance to consider.
