Once you’re in debt, it can be a real bear to get out of it. That’s why, from the most practical of standpoints, your best bet to be debt free, is to never get into debt in the first place. And it sounds so very simple on paper. But it’s the details and circumstances that will often get you in the end, and then digging out of the hole becomes a supreme effort.
So, a few hints for preventing debt in the first place include staying away from snowballs, learning your cash-only lesson, using loans as a last option, living within your means, and always making sure that you keep a savings account.
Staying Away From Snowballs
To avoid crushing debt, your first point of order is to avoid debt snowballs. If you imagine a small chunk of snow falling down a mountainside and turning into a boulder, that’s what debt can do to you once time and interest rates start to dig their claws into your financial ribs. At the first sign of interest rates accruing on debt that you’re already struggling to pay, it’s already too late. So, if you see snowballs in your future, simply stay away from that first marble-sized piece of something you can’t afford.
The Cash-Only Lesson
For a week or two some time, try living with cash only. You’ll find that psychologically, it’s much different physically handing over hard-earned dollars, and even without thinking, you’ll save yourself a ton of money. Even just getting rid of the convenience of a credit card will show you the difference between buying things that you need (which you’ll have cash for) and things that you want (which you’ll resist paying cash for).
Using Loans As a Last Option
If you want to stay out of debt, only use loans as a last option. Because if nothing else, a loan is a guarantee of debt. Even if it’s not long-term, if you have to borrow money for something that you won’t be able to make a full payment on in a few months – that’s the beginning of the slippery financial slope that many people never fully recover from.
Living Within Your Means
More than anything else, staying out of debt means that you’re living within your means. You know what your income is, and you only buy things that you can afford. So much of culture suggests that we purchase more than we need, but if you can avoid that trap, you can stay out of debt.
Keeping a Savings Account
Finally, if you always make sure that you keep some sort of savings account handy, you’ll find that you have far fewer problems with debt. First, saving money means that you aren’t spending it, and second, if there is an issue where you have to pay a chunk of money fast, you’ll have your savings account to fall back on.