Tips to avoid getting into debt even if you have low income

May 16, 2017
The first step towards a successful financial life is to avoid getting into debt, or, if you are in debt already, to pay off your creditors as quickly as possible.
avoid debt

Both avoiding debt and getting out of debt can seem very difficult for people with low monthly income. However, it is never impossible.

Here are some tips to help you avoid a debt-filled life regardless of your income level.

Use cash whenever possible

With cash, you can physically see how much money you have. If you take out cash for your expenses for the week (or the month), you will be well aware of how much you have left to spend for that period of time.

If you have to borrow money, make a plan for paying it back quickly

People get into trouble with credit cards because they are only required to make a low minimum payment each month. If you pay the minimum amount during each billing cycle, the amount of money paid as interest with grow quickly. This will keep you in debt for a longer period of time.

Online personal loans, however, are easier to manage because they are meant to help you until your next payday arrives, so there is less of a temptation to only make minimum payments.

Pay for necessities first

The first step each month should be to cover all your necessary expenses: bills, food, transportation, debt payments, and so on. Once these necessities are paid for, and your debts have been covered, you can start thinking about paying for something that you do not need, but that you really want.

Give yourself some room in your budget

If possible, plan ahead for these little “splurges.” Rewarding yourself for being financially savvy is important. You can make a plan to get the most out of these non-necessity treats. For example, opt for a month membership to a movie streaming service instead of going to the cinema once. Or, get a big package of your favorite dessert so that you can enjoy it all month instead of going to a restaurant once.

In other words, when you do spend money on something that is not a necessity, get the most possible enjoyment out of it.

Look for discounts

Sometimes, saving money is easier than you might think. You can, for example, buy generic brands while shopping for food. The goal for doing this is to lower the cost of your necessities. The more you can do this, the more money you will have to pay off debts and buy things that you enjoy.

The one thing that all these tips have in common is that they are simple. So, as you can see, you do not need to be an expert to avoid debt and take control of your financial life.