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.
Reason?
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.
Conclusion
Money matters.
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!
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I love reading this great article! It taught me a lot and this is really helpful. Thank you so much for sharing this one.
Thanks so much Alan!
Glad you liked it 🙂
I just wanna say that I found this article to be very helpful and informative. Being in the car business has my finances all out of whack because the income is so up and down. And because of this I found myself needing yo get a payday loan.
I wish I would’ve known the danger of getting stuck in these loans but I know for sure if I found this before hand I would’ve avoided it. Why can they charge so much on their interest rates?
Talk about a real scam, the rate banks charge on their credit cards and loans… and they get away with it!
Loans such as this should be avoided at all costs Gabe, and supplementing your income with a side hustle to become financially bulletproof is the way to go!
Thanks for your feedback 🙂
Hi John. Excellent advice. I’ve played the debt game before and really didn’t care for it. The best thing I did was get rid of the credit cards.
If I want something that isn’t in the budget I have 2 choices:
1) Cut back on something to leave a little bit extra
2) Increase my income
I prefer increase me income because if I can make the increase stick, then I will continue to have that extra and not have to do without anything. I love being self-employed.
Thanks, Ben, I totally agree about option number 2!
Cutting back is one of the reasons that budgets often don’t work.
Yes, you have to manage your money effectively, but increasing your income with an online business, for example, is often the best way ahead for most people.
Thanks for commenting 🙂
Hi, John. This article is indeed insightful. I found myself stuck in debt a few years back and I must agree, it can be very stressful. Dodging creditors is not easy. They are very persistent. Part of the problem is I took a lot of bad advice from friends when I was running my own business. I learned my lesson. If you want to succeed, seek advice from those who are successful.
Debt can be very stressful indeed Leonard!
Getting the right advice from trusted mentors that are successful is very important.
Thanks for your feedback 🙂
Hello, Great post when it comes to saving money, these tips are awesome. Following these tips, a person really cannot go wrong. Thanks for sharing.
Pleasure Norman, glad you liked the post and found it helpful!
Thanks for stopping by 🙂
I would agree that its just as good to save money as it is to earn it. We seem to live in a society were we must have everything now and people seem to of forgotten the lost art of saving. Its become too easy to obtain credit, and payday loans are the cause of a lot of peoples debt problems. Governments say they are going to crack down on these lenders, but more of them keep appearing on the market all the time. People need to get back to basics and save for what they want. It is possible to have the luxuries in life, you just need to be patient and you will be financially better off in the long run.
I couldn’t agree more Daniel!
We need to get back to the basics of spending less than you earn and invest the rest… Oh, and an income accelerator helps as well!
Hi John,
It took me almost ten years and over $20k of debt to realize I needed to get my act together if I ever wanted to enjoy the fruits of my labor.
I agree that the key to avoiding debt and managing your money is having a budget and sticking to it. It’s amazing how much money disappears when you’re not keeping track of it.
Thanks for sharing this post,
Diana
I think sometimes we have to almost hit rock bottom before we realise that things need to change Diana!
I too was in a lot of credit card debt, but I thought I could handle it.
I soon realised that I had to change my mindset and thank about money differently before I could get any more of it.
Thankfully, I started my online business that helped me improve my cash flow and things started to change.
Thanks for commenting 🙂
Great tips John. I’m on a journey to financial freedom myself, my goal is to get there by my late 20’s to early 30’s. I have a budget created in an Excel sheet, it’s just really inconvenient to have to open it up to catalog everything I spend money on so I seldom ever do it. Do you have any good budgeting mobile apps that you use that you’d reccomend?
It’s awesome to see someone so young committed to creating financial freedom Juan!
Personally, I don’t use an app to budget my money.
I use an Excel spreadsheet and follow a money management system that is far more flexible than a budget in my opinion!
Check it out here: Money Management
Thanks for your feedback 🙂
Hi John, thanks for breaking down the tips on managing money and how to avoid being in debt. I find the tip of avoiding impulse buying very important. Most people enjoys the rush of purchasing something without thinking twice and whether they truly need the item or not.
You also wrote about budgeting apps, may I know if there is any specific app you recommend? Do you recommend one that has online link options to the user’s bank account or a simple budgeting app to register income and charges would suffice? Thanks in advance!
Hey Merell, glad you liked the article.
As I mentioned in a previous comment, I don’t use an app to budget my money.
I use an Excel spreadsheet and follow a money management system, that is far more flexible than a budget in my opinion!
I do use online banking to automate the process, but that’s as far as I go in that respect.
Thanks for commenting 🙂