This is a sponsored post written by our friends at Debt.org, a consumer financial advocate website.
Sometimes we think debt is unavoidable, but we can work toward a debt-free lifestyle by being careful about our finances and implementing these steps:
1. Set realistic financial goals.
You can’t spend what you don’t have, and if you think you can, you’re headed for trouble. Yes, we would all like to live in a big beautiful house, take long exotic vacations, drive the newest fastest car and watch movies at home on a gazillion-inch flat-screen TV. But in setting realistic financial goals, you will not spend yourself into crippling debt, and you’ll learn to be happy with what you can afford while not obsessing over what you can’t. Fantasy is a nice place to dream about. Reality is where you live.
2. Make a budget, and stick to it.
The fact is, you can’t just print money to live on (unless you’re a counterfeiter or the federal government). Figure out what your monthly expenses are and how much is coming in to cover those expenses. Then write down the numbers in a spreadsheet or account book, get everything to balance, and promise yourself that you’re going to follow this financial blueprint, religiously. Sticking to a budget isn’t always easy, but being in debt never is.
3. Avoid late fees by paying your bills on time.
Late fees are simply “stupidity taxes.” Why would you want to give more even money to your utility company, your bank or the department store, for things you know you have to pay for, but didn’t get around to? You would be surprised at how quickly late fees and penalty charges can blow a hole in your budget and plunge you into debt. The amounts may seem small at first, but boy can they multiply.
4. Pay with cash whenever possible.
Credit cards are very convenient, but most people spend less when they have to pay with cash. Credit card debt is insidious and can mount up quickly and quietly. And if you can’t pay with cash, make sure your pay more than the minimum balance on your credit card accounts every month.
5. Build a financial safety net.
Save a percentage of your income in an interest-bearing account. By putting something aside regularly, you will have the ability to borrow from yourself in the event of a job loss or a medical emergency. It just might keep you from going back into debt.
If you have more debt than you can handle, it may be wise to speak to a debt-relief specialist. They can explain your options, which may include debt consolidation or debt settlement. Take whatever steps necessary to finally achieve a debt-free lifestyle. It will be worth the effort.
Photo Credit: PT