Follow These Tips To Stay Out Of Debt

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Getting out of debt and staying out of debt gives you the financial freedom you need to accomplish your goals in life, whether it may be purchasing a home or taking a luxury cruise to Europe. There are many debt traps waiting to be sprung on the unwary individual but by following some simple tips and being aware of what you are doing financially, you can avoid these traps and stay out of debt for a significant period of time. Here are some tips and techniques you can use to stay out of debt.

Stay Within Your Limits

Banks and credit card companies earn billions of dollars annually in over-limit charges and bounced check fees, money that account holders would had never had to pay if they had kept track of the balances of their accounts. Every transaction made should be listed in a transaction ledger so that you can keep an accurate account of how much money you are spending and what you are spending your money on. The ledger should be balanced against the account’s monthly statement on a regular basis. Each transaction that puts you over the limit could cost as much as $35 and many companies have no limit on the number of over-limit fees that you can be charged.

Avoid Impulse Purchases

Stores are experts at getting consumers to purchase things that they never intended to buy and being able to avoid the urge to purchase items on impulse can save you thousands of dollars each year. Many items bought on impulse are rarely used, often sit in a closet with the tags still attached for months or years after the purchase, or spoils before you get a chance to use it. Learning how to resist the temptation of impulse purchases will also help you avoid cluttering your home with unnecessary items.

Use Debit Instead Of Credit

Cash is generally the easiest way to pay without incurring special fees, but if you are one of the people that do not like carrying cash around with you, consider using a debit card instead of placing your purchases on a credit card. Debit cards use the money in your bank account to pay for your purchases and the money used is deducted directly from your account at the point of sale. With a debit card, you will not have to worry about interest payments on a balance or late fees if you are unable to pay back what is owed.

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