10 Tips to Avoid Getting Into Debt

Debt is a dangerous thing because it can destroy your reputation, career, family, make you a bankrupt and ruin your whole life. Here are 10 ways to avoid getting into debt


1. Live within your means: Live a lifestyle that is in line with your income levels. When you go overboard it means incurring debt to live a life you want but unaffordable.

2. Follow your budget: A budget is an advance planning to allocate your income to meet all expenses within a month and including savings as well. It is fine on paper but you have to be disciplined enough to follow the budget faithfully not to overspend.

3. Save for a big-ticket item: It is the most sensible thing to do to avoid debt and interest when you pay in cash

4. Avoid material wants: Don’t get tempted by advertisements. Something may be nice to have, but it is not an essential item. Exercise your will power, be happy, and appreciate what you have and be grateful to live.

5. Factor hire-purchase and housing loan into your monthly budget: A car or a house is a major purchase and most likely it can only be obtained by getting a loan and pay in monthly installments. However, the monthly amount has to be included in your monthly budget. If it is out of whack you need to postpone the purchase until you can pay a bigger down payment with a smaller monthly installment

6. Use a credit card as cash: The easiest way to get into debt is by using a credit card. Exercise the utmost caution and control not to use your cards to obtain items on credit. Back up the amount you charge with a similar amount in the bank so that at the end of each month you can pay credit card bills fully and promptly.

7. Emergency fund: To meet unexpected expenditures like hospitalization and major medical expenses which are not within your monthly budget always set aside an amount for such purposes.

8. Avoid impulsive spending: Follow your shopping list to avoid buying things you don’t need at all.

9. Avoid gambling: This is a bad habit to be avoided like the plague.

10. Avoid greed: Don’t listen to get-rich-quick schemes and investment with very quick and high returns. Don’t part with your hard-earned money. You may even borrow and incur debt to invest more in such schemes.


The happiest person is someone who is contented and debt-free