How to avoid debt?

A man thinking about his debt problems

Can debt be totally avoided? Here are some tips that can help you remain debt free:

1. Stick to your Budget


The first significant aid to staying out debt is having an effective and working budget. Using a budget will enable you determine if you are living beyond your means and where adjustments can be made to reduce unnecessary liabilities.

Having the budget is easier part; the harder part is living by it. This requires cultivating self-discipline, regularly checking if your purchases exceed what you had budgeted for and making the required revisions.

2. Avoid comparisons

The urge to live lavish lifestyles like our peers can drive you into debt. This can be avoided by not pegging your self-worth to what others have or their accomplishments in life.

If your expenses are tailored to your level of income, then you will eliminate the need to borrow to finance a standard of living which cannot be sustained in the long-run.

3. Weigh what is of priority


Sometimes there is a thin line between what we really need and what we want. For this reason if you are not keen, you may find yourself in the middle of the month broke and left with no alternative, but to borrow to meet your basic needs.

This common problem can be eliminated by simply ensuring that we set aside first money for our monthly basic needs, then later money that can be used to purchase non-essential items(if in cash form one can put the money in marked envelops).

4. Avoid expensive devious practices


Additive practices such as gambling, taking drugs, heavy smoking and drinking has caused people who had once good income prospects to experience financial ruin.

In order to sustain their habits they sank further and further into debt, until they lost their valuable possessions.

Hence, shunning these practices will help you be in control of your finances and avoid debt.

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