We often here experts on finance and banking coming up on various talk shows telling us about the various option we can avail if we are facing debt. Several books and articles too have been written on the same subject. It does get one wondering that if getting into debt is such a huge deal that you need so many people, and not just ordinary people, but experts, tell you how to deal with it, why not tell us about how to not get into debt to begin with?
Many people make the mistake of seeing a credit counselor only when they have hit rock bottom; that is they are about to file in for bankruptcy. If you want to do better financially, you need to prepare for it likewise as well. Do not pay debt by avoiding getting into it. Following are some of the things you could do that would help you avoid debt:
The Importance of Personal Finance:
Honestly, it would be very difficult to do anything for too long if you are bad at managing your personal finances. The importance of personal finance should be taught as a subject to all students so that once they enter into the practical field, they have the discipline and the steadiness that is required to manage money matters.
The Importance of Budget Planning:
Another thing I believe should be taught to all is how to effectively plan your budget in a manner which would not have you over spending on things. People should be taught to devise somewhat more sensible ways of spending their money. For example, rather than paying the retail prices for furniture or some new electronics that you may need, consider going for wholesale prices because they are way lesser than the retail prices.
Avoid Using Credit Cards:
Most people believe that the main source of debt is the plastic money you carry with you: your credit cards. For starters, they have very high interest rates and secondly, carrying them around with you just further tempts you to buy things that you do not necessarily need. So, if you cannot completely avoid using them, try not to carry them with you whenever you go out.
Say No to Borrowing:
Another way of avoiding debt is to stop borrowing money for something that you cannot afford at the moment. Say yes to saving and no to borrowing. While it is easy o apply for a loan and get one and then buy whatever it is that you wanted to buy, it can be difficult to pay the loan back consequently, you run the risk of running into debt.
Avoid Impulse Buying:
Just because there is a latest model of the phone that you already have, does not mean you should get it, especially since yours is working perfectly fine. In addition to this, what most of us do not realize is that while you may very gladly spend $200 on this new phone today, but it is not going to be worth that much in a couple of days. Electronics especially phones, drop down in their values very quickly.