There are many things you can do to stay out of debt. I have discussed some of them in the personal finance [http://www.leonlioe.com/category/personal-finance] section. This article will provide more tips to help you not only get rid of your debt but also live a debt free life. I’m going to share with you a few ways of practicing economy in your life which can help you to be debt free forever.

Some of the things discussed here are common sense, but sometimes common sense can be ‘uncommon’. So don’t feel bad if you look at these and think that you should have thought of them yourself - most of the time it’s the things which are under our nose that we notice the last.

In order to practice economy in your life, you must always remember to perform the following action steps…

• The first rule of practicing some economy in your life is to set yourself a spending budget according to your earning ability, and then stick to it - no exceptions!
• Learn to keep track of what you’re spending, then and there. Don’t leave it till the night time, the next day, or even the end of the week. This can lead to disaster. Instead, keep track of how much you are spending each time you buy something. This way, you can have a running total in your head about the money you have spent so far.

  If all you ever do is spend in 5’s and 10’s then there’s a better than even chance that you will never notice that you have spent over a $100 without even thinking about it.

  And although $10 or even $20 might not seem like all that much to spend, by the time your total reaches that $40 or $70 mark, you will begin to feel the burn. Keeping a tally of what you spend will make it less likely that you will ever reach that $100 mark unless it’s for something that you really need, or unless it’s for your round of weekly shopping.

• Leave your credit cards at home when you’re going shopping - this is a better way for you to get your shopping done, because this way you know that you won’t be spending more than you can afford.

  And if you really want and need whatever it is that you are thinking of buying, you always have the option of rushing home and getting your card to come back and buy it. That way, you have some time to think it over instead of buying something on impulse.

• When you are paying off your credit cards, and there are new offers from the banks, please try your very best not to look at them and instead throw them away. That way, you can be certain that you are not mounting more debt. If you do use a credit card, make sure you pay the bill off on time.
• If you have any spare cash lying around, don’t go and spend it on a new dress, or a new drill or even on a nice lunch or dinner out. Put it to better use and pay off your debts faster. This way, you will definitely have spare cash lying around later on when you have managed to pay off all your debts.

These are the ways to stay out of debt forever. If you are not consciously doing the steps above, you are practicing a false economy and you will soon be getting into debt again.

However, there are circumstances where you have to spend more than you can afford, but this should only be for those things which you absolutely must have but which are too expensive for you to pay back within the first month. This means that you will have to defray the costs to the next month as well, but this is perfectly alright as long as you control your spending on your credit card for the next month and as long as you pay off the additional expenses as soon as possible.

P.S. If you’re serious about staying out of debt forever, check out this great book: “Debt Free in 3“.

how to stay out of debt, living a debt free life, tips to stay out of debt

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This entry was posted on Tuesday, November 4th, 2008 at 8:11 am and is filed under Personal Finance. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.