The one good thing about debt is that it doesn’t just magically appear. You have a choice in the matter. That’s good news because it means borrowing money is something you can avoid.
(Mentally insert a serious-yet-appealing mascot here, who warns that only you can prevent debt.)
Once you stop taking on new debt, you’re on your way to success — because you will get your old debt paid off by making regular (and ideally larger) payments to it.
Here are 4 ways to avoid taking on new debt:
- Have at least a thousand bucks in your emergency fund. Emergencies (or more often, just expenses we forgot to plan for that feel like emergencies) are common debt culprits. Give yourself a cushion, and you’ll have cash as a ready alternative to debt.
- Plan, plan, plan. Everything mechanical or electronic that you own will need to be replaced someday — unless you can do without it completely. (Like a TV.) Plan for the replacement of the things you really don’t see how you can do without now, before they break down.
- Pay attention. Tracking your spending — even for brief periods — will show you what you’re actually doing with your money. You can make sure that you aren’t buying pizzas when you should be buying a new tire for your car.
- Make like an anti-drug commercial from the 80s and “just say no”. Hold firm on your stance against borrowing money. No, you don’t need a new pair of pants when you don’t have the money for it. No, you don’t need to get your car repaired when you don’t have the cash. No, no, no. Find alternatives to loans. They ARE out there.
Finally, keep in mind that while some of the methods for avoiding debt may seem a little…not fun, once you’re out of debt you’ll have more choices. In other words, you’ll have more money because you won’t be busy spending it on debt.
More money = fewer sacrifices. (And more fun.)
(Check out my free email series, The Debt Mindset Reset, for tips on changing the way you think about debt.)