Tips for Staying out of Debt

Even the most successful debt management program cannot keep you out of debt for long if you don't change your attitudes and spending habits. Here are some suggestions to make your debt repayment efforts last for the long haul.

• Destroy your credit cards. Before you even begin a debt management program, you should get rid of your credit cards. You might keep one card only for emergencies, but don't keep it with you. More than likely, the reason you got into debt trouble in the first place is because you have trouble resisting temptation when it comes to credit cards. If you don't have any cards with you, you can't capitulate to sudden spending urges.
• Don't spend more than you earn. One of the best debt management strategies is simply to keep your spending lower than your income. If you follow this very basic financial principle, you will never have to worry about accumulating debt again. Figure out what you earn each month and monitor what you spend so you don't exceed that amount.
• Build yourself a cushion. If you have a nest egg or financial cushion, you won't have to turn to debt every time you have a financial crisis. In other words, learn to expect unexpected expenses like car repairs, medical bills, and so on. Try to get to the point where you're saving at least 10% of every paycheck.
• Take out only good debt. The only two types of good debt are mortgages and student loans. If you limit yourself to only these kinds of loans, you are unlikely to need debt management assistance in the future. Of course, you should avoid credit cards at all costs, but also do your best to avoid things like car loans.
• If you do use debt, pay it off before interest charges apply. Think of credit card debt as a 30-day loan. Unless you can afford to pay if off in the next 30 days, you can't afford to buy the item. If you pay off your balance within 30 days, you'll avoid costly interest fees that can lead to insurmountable debt issues.
• Talk with a professional about your finances. As you embark on your debt management plan, you might consider talking to a professional, either a financial adviser or credit counselor, about your finances. Your current debt problems are likely the result of years of poor financial decisions and habits that may take a while to correct. Talking to a professional will give you the insights and guidance you need to change for good.