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Staying Debt Free

In today’s society it has become easier than ever to obtain credit cards. Think of how many offers you have received in the mail each and every month. This tempts many Canadians into spending what they cannot afford. To achieve your goal in staying debt free you should review and analyze your spending habits. You should also analyze your buying decisions closely before acting on them. You can remain debt free by following a few simple rules:

Step 1: Don’t spend what you don’t have
The most important rule in staying out of debt is not to spend what you don’t have. Do not buy anything unless you are sure you can afford it. It is very important to make a monthly budget and follow it. Only make purchases if you have the money.

Step 2: Pay cash
Try to pay cash when you make purchases and use credit cards only for emergency purposes. It is very easy and convenient to use credit cards when making a purchase, but your balance can easily accumulate through the years. You will end up with a large credit card balance and you will pay a lot of money in interest costs.

Step 3: Don’t accept credit card offers
Ignore the credit card offers you receive in the mail. You only need 1 credit card to use in emergencies. Credit card companies keep offering us different credit cards with special discounted rates. Beware of these rates. These are introductory rates, meaning you will only receive the lower rate for a few months. The rate of the card will go up after the introductory period. The interest you pay on credit cards will dig you deeper into debt.

Step 4: Pay your credit card bills
It is very important that you pay your credit card bills on time. If you make late payments on your credit card, these late payments will negatively affect your credit score. Always pay on time even if it is just the minimum payment. Your credit is a crucial component for your financial future. Paying bills entirely and before the due date keeps you out of debt, saves you money in late fees and looks good on your credit history. Keep track of all your bills.

“If you don’t need it, don’t buy it.”