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Want to avoid debt? Here are some tips

You saw how your best friend’s family lived, going from paycheck to paycheck without gaining any savings and adding a mountain of debt. They often ate at restaurants, succumbed to impulse buys, overdid it with credit card spending, and just made poor financial decisions.

If you were in their shoes, you’d realize that it was time to reevaluate a number of things in your life, namely about your spending habits. It’s time for a turnaround: Get out of debt, and sock away some emergency savings in case of a job loss, medical situation or some other life event.

Money-saving tips that can benefit everyone

Here are a few money-saving habits to consider if you want to avoid financial problems. They include:

  • Live within your financial means. If you earn $3,000 per month, make sure your monthly expenses are less than that.
  • Refinance your mortgage. Interest rates are still low, and if you have good credit, you can get a great interest rate on a 30-, 20- or 15-year mortgage.
  • Use your credit card sparingly or not at all. Don’t have more than two or three credit cards, either, because they may temp you to buy more things you don’t need. When you misuse a credit card, you are essentially borrowing money at high interest rates to pay for gifts, clothes and vacations.
  • Pay your credit card bill in full each month. This will save you on interest costs.
  • If you have a great amount of credit card debt, here’s a move that will save you money. By making half of your regular credit card payment every 14 days, you will pay off your debt 75 percent faster. How is this possible? Banks calculate interest every day. You cut interest costs by getting your money to the bank more frequently.
  • Track your expenses for six months to a year. This will allow you to determine your average monthly expenses. Better still, and a more accurate portrayal of your expenses, may be to figure out the median amount on monthly expenses. Now, you can see where your money is being spent, and you can create a budget.
  • Avoid impulse buys, especially from offers that temp you with no money down, no payments and no interest … until a year later.
  • Maintain a healthy and active life. This may help you avoid medical ailments, and, ultimately, health care costs. Don’t smoke. Avoid junk food and try to eat better.
  • For transportation, consider carpooling to work with colleagues. You may also take the bus or ride your bicycle.
  • Eat at home. Eating out at restaurants can prove costly. At work, brownbag your lunch by bringing food from home. This latter move could save you $40 a week.
  • Obtain a library card. At your community library, you can access many things for free including books, movies and even online learning courses.
  • Consider taking on a part-time job and saving all the money you earn.

You want to avoid the debt trap that has befallen many Americans. Some of these tips will allow you to gain stronger financial footing that will benefit your family. Start off with small changes, then go from there. You’ll gain peace of mind and just might avoid a trip to a credit counselor.

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