Anyone who has had the misfortune of falling into debt knows that it is a trap. The saddest part is that it is just so easy to get sucked into the trap with so many lenders around and the rules and process for getting a loan becoming easier and quicker respectively.
When everyone around you is jumping head long in to debt, is there a way for you to steer clear? How can you avoid falling in to the debt trap? If you have these questions, then below are the answers to them. Find out how you could keep away from debt.
Learn to Budget Properly
Budgeting is definitely not an inborn skill; it takes some practice and effort to get it right. But it is certainly worth the effort because effective budgeting is the first step towards effective saving and with a robust saving in hand; you have lesser chances of falling in to debt.
Once you have a clear picture of your income and expenditure, you should try and free up more money from the expenditure section and try to use it to either pay your outstanding bills (so that you are not on a deficit budget) or if you have some extra money, make sure that all of that goes into savings for a rainy day.
Learn to Prioritize Your Needs
We all have needs and your needs are different than mine or the needs of your brother. That being said, you also need to know the difference between needs and wants. Wants are not important enough to be fulfilled when compared to needs.
You have to scrutinize your monthly expenditure and see what items can be sent to the needs category and what can be relegated to the wants category.
This step in your budgeting strategy will not only help you reduce some of your current expenses but also lessen the chances of falling into debt for funding your wants.
Boost Your Current Income
It is easy to free some of your available income if you follow the tips above. But you can have much more amount to save and fund your needs, without falling in to debt, if you look for ways to boost your current income. See if you can start a part time job or if you could start a business on the side. Maybe you could do something on the weekends to generate some extra income.
Use Credit Cards Wisely
Credit cards are a great boon for people who know how to handle them wisely. But for the rest of us, it can be the major source of debt that extends for forever. Most of the people who apply online for loans at sites like https://Wonga.co.za are looking to pay off their credit card debts, says their general surveys. Never exceed 10 % of your overall credit card limit and pay the monthly bills in full each month. This avoids accumulation of interest and future debt, I hope you take heed, follow these tips and save yourself from the debt trap.