How to Avoid Debt

With high prices for everything from food to movie tickets, social and media pressure to own expensive new technology, and credit cards almost required for daily living, avoiding debt can be like avoiding sunlight in the Sahara. If a person is mindful of their actions, however, there are several ways to remain financially secure. Using thought-stopping techniques, doing research, making careful plans, and valuing relationships are all ways to keep one from sliding into financial trouble.

The first and most obvious thing to do is get spending under control. Controlling spending for some people can be like counting calories is for serial dieters—it can seem impossibly difficult. The same kind of advice for cleaning up one’s diet applies to spending. People who use journals to keep track of the food they eat end up losing up to twice as much weight as people who don’t according to ABC news. Inversely, keeping track of one’s spending can make sure one’s wallet doesn’t get too slim! Keeping a journal makes visible all the little “extras” that can add up to heavy losses; seeing these “extras” in writing can help stop that leakage. Also, thought-stopping techniques can be just as useful for preventing overspending than preventing an unhealthy food choice. Before adding something to the cart or basket—the buyer things, “Do I really need this?” Most often, the answer is “no.” Some may also choose to wait a month in advance of making a purchase; often by the end of the month the compulsion to buy something will have completely faded away.

Next, research everything! Rarely will the most obvious place to buy something be the most inexpensive place. This can be as simple as scouring the weekly ads in the mailbox for the best grocery deals, joining discount clubs, or following online coupon groups (though beware, unless someone practices thought-stopping techniques, that person may find himself or herself buying things you never would have bought just because they’re “such a great deal”). The internet is a great resource for pricing different items. One can also use the internet to teach oneself different skills that may lead to saving money. For example, how to make beauty products, bath products, how to mend clothing, how to grow a vegetable garden, and how to cook healthy and inexpensive meals!

Once you’ve done your research, you can apply what you’ve learned to the next debt avoidance tip: get really good at planning. A monthly budget is helpful and can be created after a month of tracking expenses in a spending journal. Planning helps a person avoid overspending on food or other necessities just because of being unprepared. Plan exactly how much money will be set aside for groceries, bills, and transportation.  Set up discretionary spending (it’s exactly the same as a diet — having occasional “cheats” keep a person from feeling trapped and then going on an eating, or spending-binge). Put the rest toward any loan or credit card repayments if present, and if not put the rest of the money into savings.

The last tip is to keep a close relationship with friends and family, and to be available to help people when they are in need. No matter how hard someone tries to control their finances, there will always be unforeseen circumstances that could put that person deep into debt. Someone could need a new crown on their teeth, the car could need new tires, or someone could come down with a serious and prolonged illness. If one has been a good friend or family member, there will often be someone who is willing to step in with an interest-free loan, free childcare, help with meals, or other kindnesses that could keep a person out of financial ruin. Not everyone is lucky enough to have this, but good friends typically want to help another good friend in need. If that friend in need has been a helpful friend to others, their friends and family will want to see them be successful.