Three ways to stop debt before it happens
Most of the time, no one plans on being in debt. Accumulating too much debt is something that happens over time. A few years ago you got a loan to buy a car; a few months later you purchased new household items on credit, and then you went on holiday and financed the trip on your credit card. Combined with other swipes here and there, you now find yourself in debt and may be struggling to pay it off. Regardless of how it happened, the first way to get out of debt is to stop accumulating more debt! Here are 3 ways to stop debt before it happens - whether you’re in debt now and you want to throw on the brakes before it becomes worse, or you never want to be in debt, follow these tips to stay on the right path:
- Make a budget. It’s easy to make purchases on credit, but paying back that purchase can be a completely different story. Make sure you have a solid budget in place and before making a purchase on credit, add what your payment would be to your budget. Now ask if you can really afford that purchase on credit once you see how much it’s going to affect your budget.
- Implement the 24 hour rule. It’s also easy to buy on impulse. Someone at a store is telling you that you need something, but do you? Anytime you’re thinking about buying something on credit (or buying something period), wait 24 hours before you decide to follow through. This will give you time to realise if you really do need that item, or if you were just feeling impulsive at that moment. Whatever you were interested in buying will more than likely be there tomorrow.
- If you can’t afford to buy it in cash, don’t buy it. One of the simplest rules that you can implement in order to prevent debt is to not use credit to make purchases. In other words, if you can’t afford to buy it using cash, don’t buy it.
For expert advice on how to become debt free, talk with one of our specialist debt management consultants on 1300 661 901 or enquire online.