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Live By These Rules and Stay Out of Debt

Live By These Rules and Stay Out of Debt

It is surprisingly easy to accumulate debt and can be very difficult to eliminate it. The best course of action is to avoid creating debt in the first place and manage your finances effectively so that you will be able to handle financial emergencies without relying on debt. Living by these simple rules can help you stay out of debt and make your financial future much brighter.

Only Buy What You Can Afford

One of the easiest ways to accumulate unmanageable debt is to purchase items that you cannot afford on a routine basis. Many people use their credit cards to make purchases that they do not really need at the moment and end up paying more for each item though added financing fees and interest charges. If you do not have the money in your bank account to pay for the item, then the purchase should be left to a time when you have more saved money available.

Use Cash

Paying for purchases with cash is one of the best ways to ensure that you do not overspend and create debt. Using cash limits your total purchases to the amount that you have on hand and you can easily control your spending by limiting the amount of cash you extract from the bank.

Comparison Shop

Often, the first price you see for a particular item is not the lowest price for that item in your area. A cheaper price may be found by reviewing sales flyers mailed to the home or inserted into local newspapers. Prices can also be compared online using one of the numerous websites that can compile information from multiple retailers with a simple search for the products that interest you. Many retailers will match the prices of competitors for certain items, so it can be very beneficial to find a low price for an item you desire.

Pay Off Balances Each Month

If you must use a credit card to make a large purchase, only charge what you can pay off by the end of the billing cycle. Credit cards generally have a grace period for the repayment of purchases where the account holder will not be charged financing fees or interest on purchases that are paid off before the end of the billing cycle. By paying back the money borrowed as quickly as possible, the person avoids paying the additional fees that create profit for the credit card companies.