Many consumers today are looking for ways to reduce their debt and stay out of debt permanently. Many feel that being responsible and staying out of debt means denying themselves things what they want.
This could not be further from the truth. The truth is that you can stay out of debt and still have everything that you want, if you know how to plan accordingly. Here are a few tips that will enable you to stay out of debt and still have funds left over for those things that you really want:
1) Make a Budget – This is the number one step in getting out of debt and staying out of it. You have to know what you have coming in versus what you have going out. Make a budget that lists your income each month along with what you have to pay such as mortgage or rent, food, utilities, and any other monthly necessities.
Once you have created a budget you will know better how much you have left over each month for savings. Saving is essential in keeping you debt free and ensuring that you have all of those little things that you desire. But saving is pointless if you are in debt already, so use the leftover finances to pay off outstanding debts.
2) Watch those Credit Cards – Credit cards in essence are not bad but having too many cards with high limits can be tempting. The best thing to do is to eliminate all of your credit cards with the exception of one. Choose the one that offers the lowest interest and keep it on hand for emergencies. Cards that offer cash back rewards are best so if you have one of those, keep it handy.
You do not have to use your credit card regularly but having it for emergencies is a good idea. You can use it to reserve hotel rooms, renting cars and other tasks so having one on hand is not a bad thing but you simply have to use it wisely.
3) Think before You Spend – About those things that you want, do you really need them? Is having them going to make your life easier? Think about what you are spending and why.
Before you pay out several hundred pounds for a new television set think about whether or not you really need this item.
It does not hurt to have things that you want but consider how badly you really want them. If this purchase is something that you simply cannot live without then go for it. If however, you can see yourself without this item, then save your money instead.
It is all about priorities and necessities- you don’t need the subscription to the monthly DVD club, this is a luxury which you cannot afford if you are in debt.
This article was written by Debt Free Me, a national company providing advice to those with debt problems. Click here to learn more.
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