In a society flush with credit and easy money – credit cards, buy now and pay later promotions, 0% financing and many other marketing tricks, it has become very easy to get into debt.

Here are 10 simple ways to avoid getting into debt:

1. Question the purchase

Before you go ahead and swipe that credit (or debit) card, ask yourself these 3 questions: “Do I need it?”, “Do I need it right now?”, “Are there cheaper alternatives?”. Answering these questions sincerely all of the time can literally save you from financial ruin.

2. Read the fine print

Many mouth-watering, fantastic and unbelievable offers are not what they appear to be. Read the small print to see if there are caveats that make the deal or promotion  not worth the hassle. I have come across “fantastic” furniture and car sales deals that turned out to be well-cloaked high interest loans!

3. Don’t get fooled by credit card reward points or cash-back

Don’t get me wrong here. I get hundreds of dollars annually in cash backs from using my credit cards and I love it. However, if you are not paying back your credit back balance before the grace period expires, it may not be worth your while using credit. 19.99% or more in interest payments on credit card balances do add up!

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4. Budget and plan for future expenses

Budget and plan carefully for expenses on big-ticket items, travel/vacations, renovations, a new vehicle, house down-payment, wedding, etc. When an expense is in the future, use time to your advantage, plan and save.

5. Emergency funds

It is a smart personal finance strategy to always have emergency funds set aside. By definition, an emergency fund is money saved for the rainy day and which can be accessed at short notice. It is advisable to have between 3-6 months of your monthly expenses set aside in a savings account as emergency funds. Heaven forbid, but if you suffer a job loss or medical emergency, an emergency fund may save you from having to go for emergency loans with ridiculous interest rates.

An empty wallet showing no money or debt

6. Pay your bills on time

This way you can save on interest costs and also save your credit score.

7. Review your monthly expenses

You can do this by regularly going through your bank statements or using a money management app like Mint. Look for where you can save some money and reduce or cut out waste. My wife and I ensure we do this often.

8. Learn to live within your means

As kids and even now as adults, my mother continually advises her children to live within their means. It is good advice!

9. Earn more money

Diversify, take on a part-time job, become an entrepreneur. Work on multiplying your streams of income and you may be able to afford all those ‘luxury’ items without breaking the bank and landing in debt.

10. Save, save, save!

There is no cure for indebtedness like living within your means and saving.

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