5 Smart tips to manage money and avoid debt problem
The secret to financial happiness and success is efficient money management.
Such skills help you attain your financial goals and avoid debt problems simultaneously.
Bad debt makes life complicated.
It brings stress, anxiety, and sadness in life.
So if you want to stay happy and have fun in life, then it’s important to develop efficient money management skills.
You can do it by using these 5 smart tips to manage money and avoid debt problems.
1. Skip impulsive purchases as much as you can
In my opinion, 50% of people get into debt problems due to their impulsive purchases.
They whip their credit cards, buy goods that please their eye, and then forget about them.
They don’t even need those goods or items.
Rather putting money in the savings accounts, people pay interest for the items they don’t even need in the first place.
Before buying any item, ask yourself – “Do I need this item?” If the answer is affirmative, then go ahead and buy it.
If possible, use cash instead of credit cards so that you don’t have to pay extra interest.
2. Pay your bills on time so as to avoid debt
It’s not bad to have debts as long as they are managed properly.
The problem arises when debt goes out of control and affects your life.
A simple tip to avoid big debt problems is to pay your credit card bills, utility bills, medical bills, phone bills, etc. on time.
If you have taken out a mortgage, make the monthly payments on time.
Pay your insurance premiums on time.
3. Save money and borrow less
I have met many people in debt forums who are frustrated due to payday loans.
They have borrowed payday loans to fulfill their short-term financial needs and jumped into the ‘debt sea’.
Payday loans carry high-interest rates.
A 500% interest rate is normal.
But is it possible to pay such a high-interest rate fast?
Most people can’t, and there is nothing unusual about it.
You can avoid getting into debt problems if you save more and avoid payday loans.
Think about the ways to save money on credit cards, home, fuel, clothes, transport, electricity, etc.
If you don’t get any idea, then read articles on money saving tips. Implement those tips and save money.
For instance, a nice tip to save money credit cards is to request creditors for a rate reduction after doing a quick market survey.
If you have always made timely payments on credit cards, then you can request creditors to slash the rate.
Believe me, creditors may agree to cut down interest rate since they are wary of losing good customers.
Never ever borrow payday loans since they would definitely throw you in the debt pool.
Focus on budget planning to manage money
A practical budget can help you lots of ways.
It can help you identify the areas where:
(i) You’re spending money
(ii) You should stop spending money
(iii) You should spend money
(iv) You’re getting money
A budget helps you differentiate between your ‘needs’ and ‘wants’.
It helps you track expenses and find out the areas to save more.
Remember, the more you save, the better for your financial life since you can use the extra money for
(i) Creating an emergency fund
(ii) Paying off your debts fast
Gone are those days when you need a pen and paper to formulate a budget.
Now, you can use a good budgeting app to create your budget plan.
The best part of these apps is that you can track your expenses every second.
While sipping a cup of fresh coffee from Starbucks, you can update your expenses in the app.
It’s that prompt and easy.
5. Build your nest egg:
It’s never too early to start building your nest-egg.
Research about the existing retirement plans and pick a suitable one.
Contribute regularly so that you can spend the golden years of your life beautifully.
Don’t forget to pay your income tax before the deadline.
This will help you avoid deadly penalties in the future.
It helps you buy the ingredients of happiness.
So try to earn dollars as much as possible.
Freelancing is a good way to accelerate your income.
If you’re a graphic designer, you can take up designing projects and complete them at night or weekends.
One of my friends started making so much money from freelancing jobs that he left his job suddenly.
In fact, he earns more than us.
If you’re a content developer, then you can take up content assignments and finish them off in weekends.
This is your extra money.
Enjoy the fruits of your hard labor just as you want.
Also, read – What is the best way to earn money on the Internet
~Patricia Sanders is a content contributor at Debt Consolidation Care Community.
Playing with words is her passion and reading books to acquire knowledge is her first love.
Her articles is a beautiful union of her love and passion.
Her expertise lies in writing financial articles and you can read them at https://wiki.debtcc.com/.
If you have any questions or comments feel free to leave them below.
To your success,
John W. Newman
Helping you create TIME AND FINANCIAL FREEDOM by building a PROFITABLE Business Online!
Financial Freedom Warrior!
Dream It… Believe It… Then Achieve It!
Love social media? Join me on Facebook, Twitter, Google Plus and Instagram.