Keeping debt at bay
Debt is the opposite of wealth, and we all know that we want to become wealthy, preferably sooner rather than later. The problem is that most people say, "Someday." As if something in their life is going to drastically happen and change their financial situation. The truth is, the only way "someday" is ever going to happen is if you make it happen by what you do today. Wealth is not found, it is earned. One of the top ways to earn wealth is to keep debt at bay. Here are some tips:
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- Don't over-spend. It is as simple and as difficult as that. Over-spending, spending more than you earn, or buying and planning to pay later, means debt. If you can curb your spending, cut your credit cards up, and start a budget you can stick to, then stick to it, you will be taking a huge step toward keeping debt at bay.
- Start saving. While not over-spending is critical for keeping debt at bay, you will still get into debt if you do not save as well. Why? Well, put simply, because life happens. Things break down, get injured, don't last, or get stolen. If you are to continue living comfortably, you have to have money saved for when the little and big things in life happen. When your car breaks down, you have to pay to fix it. When you get sick and are out of paid time off, you have to be able to pay your bills with a decrease in salary. When you go to wash your dishes and see your dishwasher is dead, etc. Life happens, and it can be expensive, and if you don't have some money set aside for just such instances, you will have to go into debt, or go without. Most people choose debt. So, keep debt at bay by being financially prepared.
- Have insurance. Insurance is not in place to keep things from happening, rather, to help you not be ruined financially when they do. Insurance can help keep you out of debt. If your car gets totaled, and you don't have it insured, then you would likely have to go into debt to buy a new one. If you do have insurance, they would help out after your deductible is met. Insurance is a key to staying out of debt. An ACL replacement (which is a common knee surgery) costs about $40,000 if you do not have health insurance, and closer to $4,000 if you do. Can you see how that would keep you from getting over your head in debt? All sorts of insurance are helpful.
- Evaluating yourself and your situation regularly. One of the best ways to keep debt at bay is to simply always have a clear picture of where you are at and where you are headed. If you do not realize you are spending money you do not have, then you won't stop. So, take the time to weekly evaluate your financial situation.
- Learn to go without. Debt happens when we start to think we need stuff rather than just want it. Learn to live without things until you can pay for them, and you will find your debt decrease significantly.
