Avoiding Debt

Pay in cash
To break the habit of using credit for purchases, put your credit cards on ice! Literally!! Get a Tupperware bowl with a top, fill it with water, put the cards in and put the bowl in the freezer. Your cards will be available if you really need them, but this will put a chill on impulse spending!

Plan
I know. No one likes to plan. After all, all real adults are born with an innate sense of what to do in every situation. Planning is something that only actuaries and insurance salesmen pretend to do!

Save
A savings cushion of three to six months of living expenses is the best way to avoid unwanted and unplanned credit expenses. That being said, a savings cushion of one day is better than none. Start with any amount and you will be amazed at the result. Make it a priority to put aside money each pay period into a savings account.

Establish a want-to-buy list
Whenever people feel they need to buy something that is not budgeted, they should put it on the list. They should wait seven days and find two additional prices for the same item, to be sure they are getting a good buy.

A good way to reduce debt is to develop discipline in spending habits. That may include taking away any security that might be used in case of emergencies: credit cards or other avenues of borrowing.

By committing not to go further in debt, people begin to reverse the process that produced the debt. Then, they can develop a balanced budget that will control spending and will allow them to stay within the parameters of their financial means.