How Do You Stop Yourself From Going Into Debt?

Discussion in Savings & Investments Plans started by Denis Hard • Feb 10, 2016.

  1. Denis Hard

    Denis HardWell-Known Member

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    What makes saving almost impossible for most people is because they have debts they have to pay. And it can take a really long time to clear the debts if you can't stop yourself from spending more money than you can afford to.

    What are some great ways someone can avoid slipping into debt?
     
  2. djdontpay

    djdontpayActive Member

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    Well, I would like to say that debt isn't bad if you're bringing in money every month. I understand that a lot of people do struggle to save up.

    The way to save is to put away money as soon as it comes in. How easy for me to say?

    If you can't stop yourself from spending, simply buy something like silver or a bond or something with a lockin period of say 6 months. This way you can't sell the thing and your savings will build up.

    The other way to do it, is to find something extra to do with your time. If you can bring in an extra couple of hundred dollars a month and put away that money, you'd be able to fix things.

    Still, if you're below 30 and have cc debt, don't sweat about it. You probably get paid the same wage they used to pay people 10 years ago. So, you need to use your cc and any other resources just to get by. I know a lot of people project debt as bad, but if you're young, you shouldn't be stressed about having a credit card debt. You should be stressed about getting that next promotion or career change that would propel your income into the stratosphere.
     
  3. prose

    proseActive Member

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    One simple way to keep from going into debt is to ensure that your income is greater than your expenses. Many people who are in debt have not sat down to actually calculate their monthly expenses (mortgage/rent, loan payments, energy bill, cell phone bill, cable/Internet bill, grocery expenses, daycare costs, gasoline costs, etc) and compared them to their monthly income. Calculating your monthly expenses and income are the first steps in determining a budget, to see where money can be saved and if there is enough money coming in to pay for all of the monthly expenses. Once this is done, a goal can be made for money in the budget to be put aside to pay off debt or to save for an emergency fund. The only way to be in control of your money is to keep track of it and know where it is going.
     
  4. djdontpay

    djdontpayActive Member

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    Whatever gets measures, gets accomplished. I agree with @prose@prose you just have to calculate expenses every month. But, more importantly, you need to track things. I do this every week. I picked this up from an Eben Pagan video on Youtube.

    Take a look at one of the charts I use to track my balance- this is the real thing:

    Please Log In to view this link!



    I track 3 things:
    1. Bank Balance
    2. Income
    3. Expenses

    I just get an excel out of my regular bank account, run a 7-day moving average on all 3 factors via the internet and get 3 charts that let me know how I'm doing personally. If my balance or income is going up, great. If my expenses are going down, great. If not, I fix something.
     
  5. explorerx7

    explorerx7Active Member

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    That's a good question. However in some instances some really difficult to control debt.Various methods are tried but they sometimes these efforts soon come to naught. We hear about options like investing to gain something extra but how can this be done when there are no available funds to do this. It's so difficult when the cost of bills, goods, and services keep on increasing and the income is stagnant for and extended the period. Anway a few measures that could help would be like cutting of the cable subscription, parking the car and take public transportation to work, find a second or third job if it's available. These could be done until the situation probably improves.
     
  6. Corzhens

    CorzhensWell-Known Member

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    Most of us here have experienced being in debt and maybe some have been deep in debt. When we were younger, it was always a hand-to-mouth existence especially when our business closed down due to bankruptcy. But life has to go on so we made a computation - incoming money versus outgoing. The outgoing includes the payments to our loans. And just looking at the interest would really scare you. So what we did was to check out everything - sell what we can to cover up the payments for our loans.

    Fortunately those were the olden days. Now, we are quite secured with our finances and we never overspend. That overspending sometimes put us into a hole of debt.
     
  7. djdontpay

    djdontpayActive Member

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    Well, I feel that I was in debt when I started working because starting wages really haven't increased for a long time, irrespective of the cost of living. But, also because I wanted to enjoy life. And I did. So I don't have any regrets about that, although I do wish I had saved up all of that money. Had I done that, I wouldn't have had to work as hard now. Or maybe I would have because of "growing up". Who knows? But it was really fun spending all the money I didn't have.
     
  8. debtfreegoal

    debtfreegoalNew Member

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    It's almost impossible not to go into debt! I make around a measly 40k/yr and I'm pulling out of my credit cards every month. :( Just yesterday, I needed gas to get to work and ended up overdrafting my account. I'm thinking of trading in for an electric car, like a Tesla, just to get away from these daily expenses. Sure, I know I could do better sometimes, like cut down on the number of clothes I buy, etc, but that's why I'm on these boards. Honestly, I don't know how anyone lives debt free these days!
     
  9. venusflytrap

    venusflytrapMember

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    The trick is to not buy anything on credit. And if you do, make sure that you can pay it off within three months. I have never taken out a credit, neither have I borrowed money privately. I am of the opinion that if I can't afford something than I won't buy it until I can afford it. I would never want to have to think about paying off monthly debts for things that I acquired more than three months ago.
     
  10. debtfreegoal

    debtfreegoalNew Member

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    Honestly, I have no idea what we can pay off in three months. I'm not even sure what we're currently paying off every month, except for the usual (mortgage, cars, internet/cable, etc).

    I've been cutting my expenses quite a bit: I only get my hair done every 3 weeks now and my nails are only done once a month! I'm also thinking of cutting out my trips to the waxing salon completely. Hubby is eating out less for lunch now and packing a lunch half the time, but it's the necessities that kill us.

    Just recently, hubby got a new, better paying job and recently invited all his co-workers + his boss for a barbeque. The only issue is: we had no backyard set. We couldn't put our guests on plastic chairs, so I went down to Home Depot. Bills were coming due, so I had to put the 4000 on credit, but it is a nice backyard set and I think we got a good deal. Still, how can anyone account for such expenses? So stressful!
     
  11. xTinx

    xTinxWell-Known Member

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    I think impulse buying and the "carpe diem" mentality jeopardize one's financial freedom. These two things can severely damage an individual's control over his or her own expenses. Do not be enslaved by your wants. Saving money, learning more about investments and keeping up-to-date with financial news should hopefully stop a person from going into debt.
     
  12. remnant

    remnantActive Member

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    Its not hard to avoid slipping into debt by following the old simple and tested rule of always spending less than you earn. One should develop a formula for saving a certain percentage of money however small for the rainy day. I have also discovered multiple income streams along the lines of active and passive income create a financial cushion during times of adversity. When one area is not performing, another area would provide a soft landing. It is also good to save for an item you plan to acquire over time instead of buying something because you feel you can afford it.
     
  13. Jamille

    JamilleActive Member

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    If you spend so much less that your earnings and you have some emergency funds available to cover unexpected needs, then you will be less likely to slip into debt. A stable financial life is more important to me than gratifying my needs for stuff I consider as luxuries. I like to work while I still can and when I can no longer work, I want my money to work for me. Hence, I've started a business that can generate passive income now and in the future. I haven't touched any of the earnings from the business and I'm saving to acquire another vehicle if there's an opportunity in the future.
     
  14. tonyb

    tonybActive Member

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    I am always careful with the way I manage money I wouldn't buy something on credit when I cannot foresee the ability to pay back. The same thing applies to borrowing I wouldn't ask to be loan some money when I have no means of paying back. In a nutshell to avoid going into debt do not buy things or borrow money when you cannot see the possibility of paying back.
     
  15. Alexandoy

    AlexandoyWell-Known Member

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    I am not good at this but I was able to clear all my debts with the help of a friend who taught me how to cut costs. First thing is to get a paper and divide it into 3 parts. On the first part is the income, on the second part, you write down all your expenses and on the third part would contain all your outstanding debts. Now, the hard part is the cutting down of expenses. Buy only items on sale and discounts – this is quite difficult. Next is to abstain from luxuries like soda and sweets, going out for entertainment, etc. It might not be enough but those little things surely helped in eradicating my debts.
     
  16. Kaushik Angara

    Kaushik AngaraActive Member

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    Carefully planning your income and sorting out priorities will help you avoid debts. In the case of an emergency, make sure the loan/debt amount is proportionate to the amount of money you are earning. That makes sure you will not go into over debts. Try to save a fixed amount of money from your income. Assume you are earning $10000 a month. Keep aside $1000 - $1500 and live your life with the remaining amount. Forget about the money you saved and feel as if you earning $8500 -$9000. That helps in saving money. Always plan your priorities. Know what to spend on and what to avoid.
     
  17. Vinaya

    VinayaActive Member

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    The first thing you need to do in order to stop yourself from going into debt is start spending less. If you want to spend less, you need to cut your expenses. You must start with food because food always tops the list of expenses. Stop eating things that you can live without, chocolate or ice cream.
    Secondly, take a public vehicle instead of your car. You will save a lot of money on gas bills.
     
  18. Rosyrain

    RosyrainActive Member

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    We are still trying to dig ourselves out of debt that we accumulated years ago. I have finally managed to get rid of most of the older debt and am working on the more recent debt now. It is hard when you do not know where to begin. I suggest the first step is to go online and learn as much as you can about finances and debt because everyone's situation is a little different. You need to understand interest rates and how debt effects you credit score before you can figure out how to best tackle it.

    I think the best answer is to stop accumulating new debt. Make it a point to be strict on yourself and stop spending money. I used to be the type of person who loved to go and buy new clothes and accessories all of the time. The problem was that I was buying things that were trendy at the time. Now I buy better quality timeless clothes and accessories and wear them for a lot longer.
     
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