7 Tips to Avoid Debt

Debt

“When you get in debt you become a slave.”
-Andrew Jackson

Getting into debt is easy enough. If you don’t avoid the following spending habits, sooner or later, you will be in debt beyond your control.


1. Spending more than your earnings: This is surely the quickest way to get into debt. Imagine you earn $5,000 and you spend $5500 in a month.

2. Keeping up with the Joneses: You always want to be at par or better than your neighbor. When your neighbor changes to a more expensive car you also want to do the same without thinking of your limited resources.

3. Materialistic: Get the latest mobile phone, change your living room settee set and replace your TV to the latest model. You do it by hire-purchase, but the total amount is more than your monthly budget.

4. Gambling: Nobody can be a winner in the long run. You are motivated by greed. This bad habit will drown you into a sea of debt by borrowing more and more money. You think you will make your money back in the next bet.

5. Get-rich-quick scheme: Do not be gullible enough to listen to quick and huge returns for an investment. It is always too good to be true. Don’t borrow from your friends and relatives to invest and think that you are guaranteed to receive your investment and profit in return quickly.

6. Wrong use of credit cards: Pay your credit bills fully and promptly. Don’t pay the minimum amount or sign up for a zero-interest installment plan to make purchases of big-ticket items. You will snowball your debt way beyond your means to settle and you end up as a bankrupt.

7. As a guarantor: You can’t be kind in this way. You will regret it when your good friend defaults the loan and you have to inherit the debt because you can’t even locate him. He has disappeared into thin air.


Be happy to enjoy what you have. A debt-free life is a carefree life.