Staying out of debt
There are a number of ways to get out of debt - but once that’s done, staying out of debt is just as important. It’s easy to fall back into the same habits that led to your problems in the first place. However, by taking a few preventative steps, you can ensure that you stay in control of your finances and make it easier to stay out of debt.
Reduce the temptation to spend
One of the main reasons people have fallen into debt in recent years is quite simply because it became too easy. Up until recently, it was not uncommon for credit card companies to send ready-to-use credit cards by post to people who had not applied for them, and before the credit crunch, access to other forms of credit was much easier, too.
Credit may not be as easy to come by in today’s economy, but it’s still very much available — and any form of credit brings with it the potential for irresponsible spending.
If you are the kind of person who is prone to impulse buying, then removing temptation is a good idea. It’s often useful to have a credit card or overdraft as backup, since they can prevent you from running into problems if you run into any unexpected costs. But if you have any forms of credit that you don’t need, such as additional credit cards, then closing these accounts can limit your likelihood of getting into debt.
Plan your spending
It’s all-too-common for people to fall into debt because they spent a large proportion of their money at the beginning of the month without considering other essential costs.
With that in mind, making a budget for each month and planning how all your money will be spent can give you much more control over your finances, which can make it a lot easier to stay out of debt. By setting out a list of all your essential costs, you will have a good idea of how much money you have left to spend (or save) as you wish.
Put money into savings
None of us can predict all of our costs, and sometimes unexpected expenses can cause people to fall into debt — for example, costly vehicle repairs or dental treatment. Having a credit card or overdraft as backup can stop this from becoming a serious problem in the first instance, but they are still forms of debt.
The best way to avoid this altogether is making regular savings that act as a ’safety net’ if you get into trouble with debt. If you don’t run into any problems, you have the added bonus of a growing savings account that will be accumulating interest.
