It is surprising how easy it is to get yourself in trouble with excessive amounts of debt. High debt levels can be difficult to eliminate and it could take many years to repair the damage done. A better course of action is to avoid debt altogether by following some simple rules that help you stay out of debt. Incorporating these rules into your daily lifestyle can make your financial future much brighter by helping you save more and spend less.
Pay Cash As Much As Possible
One of the best ways to stay out of debt is to pay cash for as many purchases as you can. Research has shown that people that pay with cash tend to spend less because of the emotional pull of parting with cash, which was not found when people paid with a credit card. People that pay with cash also stay within their spending limits because they have something physical to demonstrate how much they have spent and how much they have left to spend. If you want to have more control over your spending, take out a predetermined amount of cash each week and use that amount for your spending needs.
Use A Shopping List
Before heading out to a store to buy clothing or groceries, make a list of the items that you actually need and stick to this list while you are in the store. Stores are experts at getting you to spend more than you intend and can often entice you into purchasing items that you do not really need. By making a list of necessary items before leaving your home, you counteract the displays and advertising you see by having something tangible to limit what you place into your shopping basket. Shopping using a list can reduce your average spending by 30% or more.
Automate Your Savings
Automating your savings is the fastest and most effective method of boosting the balance of your savings account. Having the amount that you intend to save automatically deducted from your paycheck or checking account allows you to save without thinking about it and virtually eliminates any excuse for not saving a small amount of money each month. As long as the savings are left alone, the balance of your savings account will increase quickly, creating a good emergency fund or savings that can be used for future needs.
Have you used any of these methods to reduce your spending or increase your savings? Share your tips with our readers.
I do not think you need to poay cash, but you need to have some discipline about your shopping or credit card.
Many people get into debt trouble because spending with a credit card doesn’t feel like real money to them. They need to have cash in hand to know how much they have left to spend.