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Staying Debt-free

Everybody wants to stay debt-free, but is it easy or really, really hard? Many of our relatives and friends have mountains of debt and they are experiencing difficulty in paying them. So what can we do to help them? I have discovered several helpful tips in staying debt-free.

Author: Tony Neshtyak

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The first step is not to live beyond your means. Make sure that your expenses is not more than your income. In connection to this, stay within your budget and stick to it. Don’t buy unnecessary things and don’t be an impulsive buyer.

The second step is to save at least 10% of your income. This can be used for emergency situations so that asking a loan from someone is your last option. It’s important to save, it is your safety net. Nothing is sure in this world so must have something to tide you over during lean season. You may find yourself unexpectedly jobless or suddenly ill, you will not have to worry because you have something to spend during these unforeseen events.

The third step is proper money management. You can do this by setting goals, getting organized, cut on unnecessary expenses, establishing budgets and sticking to it, and by saving money. You can allocate money on your family’s medical insurance, your children’s college education or your pension plan. So you can be prepared and will not have emergency financial crisis that may lead to loans and debt.

You have followed these steps, and still you have debt through your credit cards. What do we do? In this modern times, we cannot live without credit cards, but in order to stay debt-free, we must know how to properly use and manage them. Whatever you charged in your account, you will have to pay them sooner or later.

The most important thing to do is to have only one or two credit cards. Avoid having more than two credit cards because you may be tempted to use all these and thus, you will incur debt to many credit card companies. And in end you be up to your neck with accumulated debt. So please, stick to just one ot two credit cards.

When using your credit card, do not spend more than 50% of your credit limit every month. It means you are living above your means. Just use your credit card wisely and charge within your budget. Pay your credit card bills promptly and fully every month so that your interest rate will not go up. Paying all your bills on time and in full is also a way to stay debt-free. Do not let your bills accumulate, you will have a harder time paying them.

It is really important to spend your money wisely and to plan for your future in order to stay debt-free. And staying this way will make your life easier and stress-free. You will have great control over your incoming and outgoing finances. You will be in control of your life and your happiness.

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