5 Top Tips To Avoid Debt This Year
One of the most common New Year’s resolutions is to get out and stay out of debt. Debt represents one of the top concerns for most people. There are some simple steps that you can take to help keep yourself from falling into the trap of debt.
Cool Down Periods
Before you make a purchase of big money items, provide yourself a five to fourteen day delay. This cool down period will diffuse the emotional high that is often accompanied with making a purchase. Spending experts say that people are less likely to buy something if they are given time to think it over. Think of how many times sales staff tells you that you must act now. They do not want to give the buyer a chance to think about the purchase.
Avoid Credit Offers
Credit card companies have gotten very creative in their marketing approach. Points may seem attractive, but they are also a temptation to make purchases that are not needed. Point systems may encourage people to spend when they normally would not. If you do use reward points, make sure that it is used responsibly or only in emergencies.
Cash is King
Use credit cards only for emergencies. Use cash or debit to keep your spending under control. It is proven that when people spend less when they limit themselves to what they have in their cash accounts. Make sure that all your major expenses and budget items are paid for. Limiting yourself to what you have left over is a great way to curb spending.
Create a Realistic Budget
Sticking to your budget can be one of the most difficult tips to follow. Make it easier by creating a budget that is realistic. Budgets that have no room for error or place hardship on you are very difficult to follow. Allow yourself reasonable expenditures, and do not assume you can cut everything down. Be realistic about what expenses you can lower and by howmuch. It is far better to save more than expected, than to fall short.
Concentrate on Debt Elimination
Existing debt can be a huge stumbling block. Focus on getting rid of the debt so that more cash is available to cover your day to day expenses. Debt can snowball and quickly get out of control. Pay off credit cards quickly and then tackle long term debts like auto loans and mortgages.
These simple steps can help keep you out of debt and even help to build savings. Debt is a major cause of stress and can even cause problems with relationships. With a little work and guidance, you can avoid debt for this year and many years to come.
* http://www.personalfinance4all.com/5-top-tips-to-avoid-debt-this-year/