American actor Will Smith once said that “many people spend money they haven’t earned, to buy things they don’t want, to impress people they don’t like,” which means that debt can become financial slavery, just by not having sound money management.
Today, social demands are increasingly high, most people resort to credit to achieve the lifestyle they think they need, but may not be able to sustain over time and that is why debt occurs.
Likewise, money may not define your essence, nor does it manifest itself in your moral values, but sound financial management will reflect a responsible attitude and will always speak well of you.
If you want to avoid debt becoming a bondage, these 5 tips will be very helpful.
1. Have a budget for everything
Planning and budgeting helps you know what and how you spend your income, and will benefit you in the following ways:
- – If your plan is to save, you can see where you consume the most money, so you can cut back on those expenses.
- – You will avoid having unnecessary consumption.
- – It will help you finance better some debt you have acquired.
2. Choosing good debt
It is important to know that not all debts are bad, for example, a good doubt could be a mortgage loan or a credit for education, because as time goes by, they will increase in value over time, and will become assets that will improve your current conditions.
3. Don’t use your credit card for small expenses
When making a purchase with your credit card you can ask yourself the following question: Am I compromising my future income? Answer this question and you will know if it is really necessary or not to use it.
4. Give yourself treats that you can finance with savings
It’s not bad to think about having a family vacation, the wallet from the new designer collection you like so much, the car of the year you’ve always dreamed of, or all those things that may seem like “whims”, but that somehow will bring happiness to your life or your family’s. For that, it is recommended that you start a savings plan that can finance them, so that you avoid resorting to unnecessary credit, which ends up paying 3 times its value.
5. Be responsible with your finances
In a parable from the Bible, in 2 Corinthians 9 it says that: “He who sows little, reaps little, he who always reaps much”; that is why in order to have a good financial stability, you should invest your money in order to make it grow, to achieve personal and family benefits and to avoid debt.
Holidays under control
Once the Christmas and New Year’s Eve holiday season has arrived, there is another series of suggestions that you can follow so as not to accumulate during the Christmas season, everything that you avoided during the rest of the year. Pay attention to the following suggestions:
6 Be aware of your debts
Not only must you remember the debts and commitments you have already acquired, but those you will have to or could face. Make conscious expenditures.
7 Don’t compromise your fund
The so-called economic “mattress”, the money you have saved or put aside, should not be compromised this season, especially if it is for trivial expenses such as gifts or celebrations.
8 Make a budget
Establish the amount of money you will have by that date, what it will be used for, and stick to it.
9 Do not make compulsive or last minute purchases
The lack of planning in the purchases is always expensive, avoid them.
In short, avoiding debt is a practice that will benefit your finances and your life in general. All it takes is a little self-control, responsibility and organization to meet the financial goals that will lead you to success at the end of the year.