If you’re struggling with debt, there is a way to get out and stay out. Read on for our 3 tips on how to stay out of debt today.
It’s sad but true: most Americans are in some form of debt. That may be a debt to credit card companies or other money lenders, to schools or universities, or to medical practitioners.
Fighting your way out of debt can be difficult, but it is possible. Once you’re out of the hole, the last thing you’ll want to do is to get back into it. But living debt-free can be very difficult for most people.
Do you know how to stay out of debt once you’re in the clear? Read on and we’ll share with you a few key tips.
- Use Credit Cards Responsibly
A lot of people lean heavily on their credit cards when it comes to making purchases. Why not? They provide a great resource, allowing you to purchase something now and make a payment later down the line.
However, this purchasing mentality is what lands people in debt to begin with.
If you really want to ensure you’ll be debt-free for the foreseeable future you need to start using your credit cards responsibly. That means paying your bills on time. Of course, everyone always intends to pay their bills, sometimes they just don’t have the resources to do so.
How can you be different? By using your credit card more like a debit card. You should NEVER use your credit card to pay for something you couldn’t afford with the cash you have on-hand.
Introducing this mentality can help you avoid getting into debt later down the line.
- Be Smart About Rent
A worrying study from Harvard indicated that Americans are paying far too much for their housing. It’s tempting to want to live in a great location with a great home or apartment. However, if you want to keep yourself out of debt, you may need to make a sacrifice somewhere.
Convention wisdom states that you should be spending 30% of your monthly income in order to pay for housing. If you use 50% or more, you’re likely not budgeting in a way that is going to serve you well.
It can be hard to find somewhere you want to live that will keep you out of debt, but it is essential for your financial future regardless.
- Avoid Fees and Charges
Most institutions run on the ideas of fees and charges. Credit card companies, medical institutions, subscription services and more: all of these entities make extra money by charging you for mistakes or extra benefits.
It should be your focus to avoid these extra charges at all costs. They can totally throw your budget out of whack.
Take some extra time to ensure you’ve done things properly to avoid certain fees. When you clear your medical debt, make sure you’ve completely closed your account with a medical provider. Make sure you don’t overdraft your bank account and avoid out-of-network ATMs.
If you take these steps and more, you can limit the amount of money you spend on unnecessary penalties.
The Basics on How to Stay Out of Debt
It can be difficult to know how to stay out of debt once you’re in the clear. The above advice can help you keep on the right path to financial stability.
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