How to stay out of debt

It sounds easy when you say it but actually learning how to stay out of debt requires self awareness and an iron will. Self control is something that you need to work on daily to ensure having success staying out of debt. I realize there have been thousands of articles already written on reducing debt or how to pay down debt and yes here is another one. The reason being is that there are so many hundreds of thousands maybe millions of people in North America and around the world that lose sight of the importance of having control of their spending and end up in huge debt or worse and have to declare bankruptcy. That is not somewhere that you want to venture.
Assuming you are somewhat debt free. The average person living a conventional life has a steady 9 to 5 Monday to Friday job with a mortgage and maybe a car payment, possibly expenses for your children as well. If that is all the debt you have and you have no credit card debt or other outstanding loans then you are doing better than half of the people out there. Ideally you would have no loans outstanding but that is something you can work towards.
If you want to stay out of debt and maybe even pay down your mortgage sooner rather than later here is what I did and what I am suggesting you do.
– Start to take note of everything you are spending money on. I mean everything. Don’t just do it for a few days or even just a month. Track all spending for as much as 6 months. After a while you will see a pattern in your spending and it will be easier to make an adjustment when you know where your money is going.
– After keeping track of every single cent you spend for a few months you can start to analyze each spending to decide whether it is necessary or whether you can somehow spend less to get the same thing or result. For instance if you buy coffee at the coffee shop every morning possibly you can start brewing coffee at home and bringing some to work.
– When you do make purchases especially large purchases like buying a new vehicle or a house make sure the expense is not beyond your means. Don’t put yourself into a situation that leaves you with little to know spending money.
– Never spend more than what you have coming in for money. If you clear $2,500 a month make sure all of your expenses and pleasures cost less than $2,500 a month. That is what living below your means is. This is where your iron will comes into play.
That is what you need to do to stay out of debt. Keep track of your spending, change your spending habits, Don’t spend beyond your means. One other thing you should be doing if you do have outstanding expenses is put any extra cash you have down on things like mortgages. You won’t feel the benefit of doing that immediately but a few years down the road you will be very glad you did. Do yourself another favour and do not use credit cards unless you absolutely have to. If you want to stay out of debt and some day have financial freedom only use credit cards for emergencies when you don’t have enough money to pay for something or using a credit card on a vacation knowing you will be able to pay the card off when you get home.