Debt Cures
Debt is at an all-time high in many parts of the world. Statistics show that the per household debt in the United States alone is over $15,000. And that does not include mortgage debt.
It doesn’t matter if you have a little debt or a lot, it is still a good ides to get rid of it. Some will find it easier than others, but debt problems are not directly related to the amount of one’s income. What really makes the biggest difference are your money habits. Sadly, those that will find it hardest to get out of debt will be those with the worst habits.
The reasons for going into debt vary by person. Sometimes it is frivolous: the new outfit, that emergency vacation to Hawaii, or any number of purchased status symbols that will show the world you are doing better than your neighbors. On the other side are those who get into debt due to serious hardships: unexpected unemployment, medical concerns or other things that are not within their control.
There are many techniques to get out of debt, but what if instead of getting out of debt, people were able to avoid it in the first place? The good news is that there are some ways to prevent debt. We will look at those based on the two different ways the debt was incurred.
Frivolous debt
It is easy to say stop buying stuff you don’t need. While it is that simple to not get into that kind of debt, there is often an underlying cause that needs to be addressed. For instance, if your were raised in a family that always got what it wanted when it wanted it, then you may find yourself doing the same thing when you are on your own. But maybe your parents were already well-established financially and had the means to purchase these things. Regardless, if you are used to instant gratification it can be tough to say no to the things you want right now
The very first step is to promise yourself that you will only purchase those things you need. Make that promise now.
Next, you will have to address any underlying problems. Deep down, most of us know these purchases are superficial, but for some reason they make us feel good.
Emergency debt
Nobody is able to predict, or prevent, these unexpected bad things before they happen, but you can reduce how much debt they will create in your life. The key is to have the means to handle emergencies as they arise
The surest way to do this is to start an aggressive savings plan. That way it will not be a shock to your budget when the unexpected happens. Experts often recommend stashing away 10% of your gross income as a start, and it is good advice. What they don’t mention is that it will not be easy if you do not have the savings habit. You may feel a pinch when saving, but it will be a lot harder to get by if you are $20,000 in debt and can’t afford the bare necessities. The trick is to be consistent. A little discipline now makes it easier to enjoy life later – and if those major emergencies somehow pass you by, you will have a nice nest egg later in life.
Pay yourself first – Set up automatic transfer to savings – Save your spare change.
In reality most people that go into debt, do so as the result of some combination of these two ways. Because you can’t be sure what the future will bring, it is best to apply as many of the above tips as you can. There is also one thing everyone can do to minimize debt. That is to only buy the things you have the cash on hand to buy right now. Make this your new mantra:
“If you have to charge it – You can’t afford it”
Saying it to yourself is not enough. Write it on a sticky note and attach it to any credit cards you have. That way you will see it any time you reach for your credit card to make a purchase.
One of the things that makes it hard to give up the credit habit is that it is a fact of modern life that having a credit card is vital for many things. Travel, reservations, and account verification are some of the things we need credit cards for. If you absolutely must use your credit card, make sure you will be able to pay off your balance right away. And if you can’t – you can’t afford it.