5 tips to avoid unnecessary debt

Everyone may have times in their life when they need to borrow money (how many of us can buy a house without taking out a mortgage, for example?). However, it is all too tempting to get into debt for things that you don’t actually need, so here are some tips for helping you to avoid unnecessary debt that can pile up very quickly. NB: My inspiration for this post comes from a recent Debt Free Direct press release that shows how UK debt is still on the increase!

1: Keep credit cards for use in emergencies only, and don’t be tempted to have a wallet full of them. Stick to one or two at the very most, and if you can’t trust yourself not to spend, then don’t have any at all.

2: Think long and hard before spending any of your hard-earned money, and consider whether you really NEED that new outfit, or if it is just something you WANT.

3: Save up for the major purchases you want to make; if you know you will need to replace something in the future, start a savings plan for it ahead of time. In fact, it is wise to save as much money as you can, so that you have the funds available if you lose your job, or you need to replace your car (note that I don’t say need a NEW car, since you don’t).

4: Live within your means, and don’t be influenced by magazines, TV, friends, neighbours or celebrities. The famous can afford designer clothing; someone on an average salary cannot. Your neighbours may appear to have an enviable lifestyle, but perhaps they are financing it with credit.

5: Budget carefully. It may be boring, but looking at your outgoings and income will help you see where your money is going, and if you are spending more than you can afford. You can then identify where you can make savings.