Steering Away from Financial Debt

Kimberly Watson, Editor in Chief
February 02, 2012 /

As even the simplest thing has become so very expensive, it is very easy to fall into a pattern of owing so much that eventually you are bankrupt. Inadequate planning of monthly income, paying off loans with high interest rates attached, no insurance or medical aid, high mortgage premiums and food prices are all factors that contribute to these predicaments.

Now is the time for economical and wise spending! This will help you maintain a reasonable lifestyle for both the present and the future and to avoid your getting into a bad debt situation. It is a financial fact that bad debt encourages borrowing, which in turn, leads to paying high interest rates on money loans.

First, create a budget, and then make sure that you stay within its limits. Note all your expenditure for the month, such as food, mortgage, utilities, and entertainment and travel expenses. Ensure you spend any balance only on necessities, forgetting about indulging in any impulse buying.

This may be difficult in the beginning, but you will soon adjust to this method of keeping track on your expenditure. Pay off any accounts due and be disciplined about not restarting them with any new purchases. Determining who what needs paying before payday is always a good plan, as you are then aware of exactly how much you must allow for in that particular month.

Financial debt is one of the most worrisome situations in which to find your-self, as it seems as though it is insurmountable. Therefore, the saying ‘stop before you start’ is most applicable in this type of situation. Saving and spending wisely will ensure that this monetary burden does not happen to you.

Credit card purchasing is one of the easiest gambits for overspending. If you find that you cannot control this financial trap, then, pay them off and tear them up.

 

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