avoid debt

Basic Debt Avoidance Tips

The first rule about loans is – Don’t get one. Of course there are times when you are forced to get one (i.e. Hospital bills, natural disasters, accidents, etc), but other than that you should stay away from loans. Get a stable and permanent job; this will give you a guaranteed income. With this income you should put you planning and budgeting skills to good use. If you don’t have those skills, this is the time to acquire them.

Another good way of avoiding debt is to avoid succumbing to temptation. No, this is not some religious advice but more like common sense. There is no need to switch to a 3D-LED-LCD TV if you already have a good TV in your home. You don’t need it. Put the spare cash in the bank and save up, you will be thankful for it later on.
If you have a credit card or if you already have a loan / mortgage, make sure you pay the installments on time. This is very important for your credit status as well as avoiding a payment snowballing effect. This is definitely one place where avoiding indulgence can help you.

Read and learn. There is a lot of free advice on the internet which can help you manage your financials. Not everything is accurate, but the more you read the more you will be able to make better decisions for yourself. Last but not least, be good with your creditors. Build up a relationship with them and you will find a lot of slack being cut for you. This will help you if you get behind on payments or if you are unable to make any at all.

avoid debt

Advice for Novice Credit Card Users to Avoid Debt

Credit cards are wonderful things that let you spend money that you don’t have. This is why 99 percent of people get into debt. If you are new to the world of credit cards, here are a few simple tips that you should keep in mind to avoid debt.

1. Using a credit card requires a lot of responsibility. Primarily you should have one only to be used in emergencies. The occasional splurge may be unavoidable, but don’t do it often. For regular spending you are best advised to resort to cash or debit cards, as you will realize your limits. If there is a really great TV, DVD player, Xbox etc that you want to buy, you are better off saving up for it.

2. The money you spend is not your own. When you make a purchase on your credit card, you are borrowing money. At the end of the month the money has to be repaid. If the amount is larger than what you can afford to repay, then you are going to get into trouble.

3. Interest will kill you. Credit card companies love people who are late on their payments as they get charged thundering amounts as interest. This is why you should make your payments on time. In fact, if you can settle you whole bill in one go, it would be an ideal thing to do.

4. Keep track. Make sure you keep every receipt you get from a credit card transaction. This will help you keep track of your expenses. Most importantly they will help you to verify the credit card statement details. If they do not match, you can always dispute the statement and get it altered.