7 tips to Stay Out of Debt

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The key strategy to stay out of debt is creating a realistic monthly budget for that includes all income and expenses, and once created sticking to the budget.

The easiest way to stay on a budget is to spend less. Here are 7 common sense tips, and techniques for saving money:

1) Use a debit card for your purchases.  People spend around 15 percent more on purchases paid with a credit card.

2) Eat in or bring a meal Make lunch or dinner at home instead of “grabbing a quick bite.” Saving at least $15 per week by cutting out a restaurant meal or two will add up to $780 annually.

3) Stop the expensive little indulgences Common knowledge tells us that over the past few years of recession, people bought fewer expensive coffee drinks. Yet Starbucks’ revenues are rebounding, an indicator that people might be ordering again. Breaking a twice-a-week latte habit can save $500 annually. If coffee is not your vice, then review your little treats to see if you can economize painlessly. Are yours pay-per-view or premium cable? Daily soft drinks? Weekly clothes shopping? An expensive hobby? Prepackaged meals, such as frozen dinners?

4) Cut your communications costs Drop your land-line and use only your cell phone or make calls over the Internet using a service such as Skype. Wait before buying a smart phone.

5) Shop for insurance Talk with your agent about raising the deductible or finding other discounts if you have a clean driving record. Gather all of your policies and shop around for equivalent coverage at different companies.

6) Make you used car last longer Fuel economy is important, but it is not the greatest cost in owning a vehicle. Depreciation is the largest cost of owning a vehicle. The longer you hang onto your used vehicle, the lower your transportation costs will be. On that subject, if you own more than one vehicle, do you really need your second car? Your third?

7) Never have cash in your wallet. That is entirely because cash is the devil, the purveyor of wanton expenditures. Cash sitting in your wallet is begging to be spent, like an itch you can’t quite reach. It is easier to control your spending when it isn’t in cash form. Don’t believe me? Think about all the times you started your day with $60 in your wallet and ended it with zero, then can’t recall where it went. That’s pretty much all the time. Keep it to a bare minimum.

For your monthly bills, be sure that you do not miss a payment. One late payment can lower your credit score. Use online bill pay or email reminders if necessary. Also, pay down credit card debt first. Credit card debt is often the most expensive debt, in terms of the interest rate you are charged. It can become unmanageable, if you are only paying the minimum amount, especially if you continue to use the cards.

Tina is a DailyStar senior writer. She graduated from Edith Cowan University. Writing has always been something she enjoyed. Her positive outlook colours every aspect of her life. Her motto -Life’s too short so get living.

When she’s not busy writing, Tina is exploring the city she adores, running in her local Park every day, drinking an absurd amount of coffee, taking care of an adorable pup, kids and traveling.

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