Unfortunately many of us spend a large part of our lives trying to pay off debt we have accumulated over the years from student loans, credit cards, overdrafts and many other forms of debt. Debt seems to seep into every aspect of our lives as well as financially. If you have struggled to pay off debt, here are some handy tips to prevent debt or help prevent getting further into debt.
Create A Budget
Budget planning sounds like a big effort especially when people have such busy lives now days. The best way to prevent debt or prevent further debt is to create a budget and stick to it. Unfortunately when it comes to debt it can spiral out of control quickly, to make sure you stay on top of it is to face the debt head on. Debt can get out of hand rather rapidly, and if you are in need of help it is a wise idea to possibly look into getting help such as in the form of a Scottish trust deed. Then you will be able to make more affordable monthly payments. The Income and Expenditure spreadsheet on this site can help with that.
If you have already accumulated debt set aside some time to make a list of your debt and how much money you owe. Then you will need to make more time to create a budget, in your budget you need to take inconsideration your incomings, your debt, your monthly bills and anything else you will have to budget for throughout the month. After the budget has been created you then have a rough idea of how much of your money is going where.
Shop Around For Deals
Every month, everyone has a list of things that they need to pay out for like shopping, bills, phone tariffs, travel costs and other essentials. You can easily lower yours costs by shopping around for the best deals and prices that are available. This can be done by visiting one of many comparison websites to see if you can lower your monthly outgoings. There are plenty of comparison websites out there dedicated to specific items from gas, electric to even phone tariffs.
Once you have created a budget you will easily be able to identify how much you are spending each month and what that money is going on. Your budget should also shed some light in which areas you can make some cut backs. Reducing your expenditures could include walking where you can to save on travel fares as well as taking lunch with you to work. If you make small cut backs in each area you will instantly start to see the money you are saving. Always prioritise your spending too, make sure the most important payments are done first, if your bills and taxes aren’t paid there can be severe consequences. If there is money left in your budget it is wise to start to learn to save a portion of that.
The best way to prevent debt especially if you don’t have any existing debt is to save money each month. If you have money left over in you budget at the end of each month try to build up a rainy day fund and put it in a savings account. When it comes to saving money it is best to set a target of how much you want to have saved. Always remember the rainy day fund is made for emergencies not treats. If you do happen to have debt looming over your head, still try to save some money where you can as you will be less likely to sink back in to that debt in the future.