Stop Debt: Tips For Staying Out of Debt

Shopping is far more fun than saving. Everywhere you turn you see advertisements for any consumer item. New shoes, new clothes, new electronics - how is it possible to not simply spend, spend spend? Banks innundate you with offers for credit from pre-approved credit cards, platinum credit cards, zero percent APR cards and cash back credit cards.

The desire to spend money in order to aquire new toys, clothing and things you simply can't live without is fueled by the easy aquisition of credit and debit cards. The combination of the two is a recipe for financial disaster.

So how do you stop debt in its tracks?

Its easy, at least in principal. Spend less than you earn. Attempting to live above ones means results in the gradual accumulation of debt. Before you realize how far under you are, you may have aquired several credit cards, be making minimum payments on all of them and have debt collectors breathing down your neck.

If you only make $1000 a month and you spend $1500 a month you are living above your means, thereby creating debt. To avoid debt, you must start living below your means. This means you should be setting aside something for yourself first. A goal of 10% of what you make is ideal, but you may not think you can afford that much just yet.

As an example, if you make $1000 a month, your eventual goal should save $100 each month. Doing this well help you avoid debt by limiting your extra spending cash as well as building up savings.

You will have to make difficult choices in order to accomplish this, and while difficult, it will soon become habit. Some things you cannot avoid paying every month, like rent, food and basic utilities. Contrary to what you might already believe, you do not need new clothes each month to live, nor that expensive cable upgrade.

Ask yourself two questions before making every purchase. �Can I afford it?� and �Do I need it?� Just because you can afford it doesn�t mean that you need it. By making disciplined decisions about your purchases, you avoid overspending.

Taking your credit cards out of your wallet is another useful tactic to avoid accumulating new debt. If you don�t have your credit card, then you can�t make a purchase. This will cut out impulsive purchase decisions.

If you see something you need to purchase, you can always go back home to get your credit card. When you leave your credit card at home, you have time to really consider whether or not the item is worth coming back for. If it is, then it is likely something that you really need.