We are constantly bombarded with the idea that debt isn't so bad, and most of this comes from advertising. To buy what you want, all you have to do is swipe your credit card. With revolving credit and multiple cards, it seems like you can buy almost anything you want. So, debt can slowly build up and cause a lot of stress in your life. Also, it can hurt your credit score. This means that if you need a loan in the future, you may be rudely turned down.
But you can do other things.
Get thrifty.
Make it a habit to save money. When you buy something, you should try to get a lower price if you can. For example, when you buy a cell phone, shop around for the best price. Know how much money you have coming in and how much you have to spend every month. Make a budget to keep track of all your costs, both regular and unexpected. This is true even if you have a good job that pays well; in fact, it may be even more important to stick to a budget if you do.
Coupon Clipping
You can save money on groceries and other things, like getting your hair cut at a salon or buying hardware supplies, by using coupons. When you use coupons, you have to spend a little more time looking for them and cutting them out. But the financial payoff of real savings that add up over time may make some people raise their eyebrows.
The phone bill
If you use phone cards, check to see if they have any fees. Find the best deals if you make long-distance calls, and don't make as many as you don't need to if you pay by the minute. Get rid of membership cards you don't use very often.
One Credit Card Only
Get rid of your wallet full of credit cards and your revolving credit, if you have any. Before your card is cancelled, you will need to make a payment at some point. Think about how much money you need. Even costs like annual fees and subscriptions can add up over time. Also, most credit cards have very high interest rates. So keep one card for things you need, but don't use credit cards for things you don't need.
Good vs. Bad Debt
Good debts are those that help you build assets and increase your net worth over time. These things include a house, land, a few pieces of jewellery, investments in commodities, and even a college degree. You could also borrow money to come up with an idea for your own product, maybe for your own small business. On the other hand, bad debts are pretty much anything else that isn't likely to get more valuable over time. Things that fall into this group include clothes, tools, and most cars. If you don't have extra money, it's not worth it to buy these things on credit.
These are just a few of the many easy steps you can take to get out of debt.
