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Avoiding Finance Stress: Smart Debt Avoiding Strategies to Consider

August 31, 2010 by · Leave a Comment 

Why is it so difficult to earn money, but so easy to spend it all? Cleaning out your wallet could take seconds, and paying the price for doing so could take decades. Debts eventually take their toll on any individual, and it affects his or her physical, mental and emotional health. Therefore, would it make any sense to say debt equals death? If this is true, then the key to a longer, stress-free life is debt avoidance. Here are some practical but wise tricks on how to avoid drowning in debt.

Take budgeting seriously. Do not rely on mental ability to think about where to put your money. Sit down and create a spreadsheet, organizing the money that your have on hand versus the things you need to pay for and buy, versus the savings you can get. The most challenging part of budgeting is not creating it, but sticking to it.

Take your charge cards out of your wallet. The thicker your wallet is with charge and credit cards, the more lax you will be when spending. Always go for cash when making small purchases, and reserve your credit card for major purchases and online transactions.

Save up for the rainy days. Allot a percentage of your money for any unforeseen event or crisis, such as a sudden hospitalization, penalties, fees or emergency expenditures. Most of financial problems and debts begin with an unexpected need to spend. An emergency fund is always critical.

Leave your impulse. A nice piece of clothing, or food that looks delicious can easily tempt you, but knowing your wants versus your needs easily helps you identify what you can afford to spend on, and what you should be content just looking at and not purchasing. If you are unsure about a product, leave it, and think about it for a week. You may not even feel like buying it after the week has passed.

Take advantage of sales and thrift deals. Buying two for the price of one, getting a freebie for a purchase and other thrift deals can save you pennies, and summing up these pennies can eventually allow you to save more than what you had expected to.

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