What keeps you up at night? For me, it’s monetary woes, and this is odd, because financially, I’d describe my situation as stable. I may not be about to buy a yacht but nor am I in the position where I’m about to lose the house. Yet, I still fret and fear the situation where my cheques will start to bounce. Or, where I struggle to even pay the bills without a loan. I’ve seen debt hit too many people in the past, and that’s why I’m always wary about spending money. I know the issues it can lead to if you’re not careful with your finances. That’s why I’ve worked hard to create a plan intended to keep me and my family debt free. You can use it too.
Avoid Living On Credit
Do I have a credit card? You bet I do, but how often do I use it? The answer is as little as possible because I’m worried about owing money. Owing money isn’t always dangerous as I’ll tell you further down. However, credit cards certainly are, and I think I know why. Credit cards give you too much freedom. They’re little pieces of plastic that if you flash them around you can buy virtually anything that you want. I’ll give you an example. If I wanted to, I could go and buy a boat using a couple of credit cards. I wouldn’t but I could and that’s a scary thought. I think a lot of people think that when they have a credit card the money on it is there’s. It’s not, of course; the money is borrowed, and it’s no different to a loan. That’s why I think credit cards should be used for emergencies only.
Protect Your Credit Rating
To ensure you don’t end up in debt, I also think that you need to protect your credit rating. In some cases, this may mean, borrowing money. It’s not as crazy as it sounds because you want to make sure that you don’t fall late on payments. So, if you think you don’t have the money to pay the bills one month, it makes sense to look into homeowner secured loans. With this, you’ll be able to pay off the money you owe so your credit score isn’t affected. You can then pay the loan back next month when you’re sure to have the cash. Protecting your credit rating allows you to always have access to the best loans on the market. Loans are, unfortunately, just a fact of life. Think about when you buy a home, for instance. You can’t do that without a loan.
Live On A Budget
Of course, if you live on a budget, you won’t have to borrow money that often. Instead, you can always make sure you have what you need in your bank account. You just need to think about your average spendings and compare that with the money you make. The amount in between is wiggle room that you may or may not spend. Personally, I’d recommend saving most of it. That way, you’ll always have a fund for a raining day.
Debt is a nightmare and there’s no doubt about that. Take my advice and you’ll never find yourself waking up in a cold, sweat panic due to money troubles.
Picture credit: www.thebluediamondgallery.com