As inflation and import costs have risen, shoppers have been hit with bigger bills when… Read more »
10 ways to avoid getting into debt again
If you’ve been in debt and have gone through the tireless, difficult process of paying back your creditors and putting yourself back into the black, it goes without saying you’ll want to avoid having to do so ever again.
Getting out of debt should be a one-way street – there should be absolutely no turning back.
In this post, we’ve got 10 brilliant tips that will help you stay out of debt.
Don’t spend more than you can afford
It is highly likely that the primary reason you got yourself into debt originally was due to the age old problem of spending more than you can afford. If you can’t afford something – don’t buy it. Don’t aspire to things out of your reach and make the most of what you have.
Spend less than you earn
Your pay-packet ends up in your bank account at the end of every month, but do you pay enough attention to the amount? Every month, remind yourself of that figure and vow never to spend above it. That way, you’ll never have to borrow, ever again.
Track your expenses
The money you spend on essentials such as petrol and the weekly food shop may amount to far more than you may think. Start tracking your expenses on a spreadsheet – they’ll come in handy for the next tip…
Produce a monthly budget
You may be thinking budgeting is purely a business function, but it absolutely has a place in the home. By creating a monthly budget, you’ll be able to accurately track your expenditure against income and make savings where it matters.
Regularly review your spending
A pub lunch here, cinema trip there – every time you place your card in that Chip and Pin machine, you’re emptying money out of your account. Identify frivolous spending and cut it out. You can even review essential spending (for example, your water bill) and find ways to trim the cost there.
Do without credit cards
Credit cards are only viable if the balance is religiously paid off at the end of every month. If you are unable to do that and if plastic was one of the prime reasons you ended up in debt before, cut them out. Only use debit cards and cash.
Find ways to raise your income
We live in a very entrepreneurial society with people finding all manner of ingenious ways to raise their income. Even if you have a decent regular job, have a think about anything you can do on the side to increase the amount of cash you’re bringing in each month. For example, a favourite hobby could be turned into a mini business relatively easily.
Cancel unnecessary direct debits
You may have done this as part of your debt-clearing process, but if not, take a look at your Direct Debit list. When was the last time that video streaming subscription got use? What about the car insurance payment for the car you no longer own? Cancel everything but life’s essentials (your mortgage/rent, insurance and utilities).
You may want that new car, but do you need it? Again, a primary reason for falling into debt is the inability to repay creditors. Don’t borrow money – you’ve worked your way back into the black and if you decide to finance something you’ll fall back into the red instantly.
Now you’re out of debt and having followed the above advice, you should have a surplus available each month. Rather than dipping into it and treating yourself, try saving instead. That money will come in handy one day; a surprise boiler breakdown or car repair will suddenly be fixable without relying on debt.
You’ve done the hard work and ridded yourself of debt. Now, it’s time to stay that way. We hope you find the above tips useful and that they enable you to clear a path to a completely debt-free future.