How to Stay Out of Debt

Congratulations! You’ve beaten credit card debt. Past are the days of avoiding phone calls from creditors, using credit cards to pay your bills and wondering if another trip to the grocery store is possible. You’ve gotten this far so you want to make sure you don’t go back. Life after debt is hard work, but it’s very possible. These are a few tips to help you stay out of debt.

1. Use cash
Money becomes real when it’s cash. You can watch your money go to groceries or bills and you have a better sense of how you’re spending it. When you use a credit card, there is no immediate sense of money coming out of your hand or account. Using cash gives you a new perspective on your spending.
When you’re trying to maintain a budget, laying cash out in different piles for different spending is the best way to go. Not only will you see how much money you plan to spend, but once the money allotted for a certain expense is gone, it’s gone. You’ll notice how much you start asking yourself if another trip to Starbucks is really necessary.

2. Keep a journal of your spending
Do you really need those fries, that nail polish, that extra case of golf balls? When you keep a journal of your spending, you will start to see trends and have a better understanding on little purchases you don’t really need. A coffee might only be a couple of dollars, but those dollars add up over a week, month or year. A journal will help you monitor your spending habits and give you a better understanding where you can save money.

3. Make budgeting fun
Are you married or have a partner? Try friendly competitions around who can save the most. Split up your grocery list, divide and conquer. Set timelines and goals for saving and reward yourself at the end. Cook a special dinner, or have a picnic. Maybe stay in all day and watch movies. Do you have kids? Turn grocery shopping into a treasure hunt. Whoever finds the best deal gets a prize. Not only are you getting your family involved and turning budgeting into a team effort, but you’re teaching your kids the value of money so they can stay out of debt in the future.

4. Live in the present
You’ve learned from your past mistakes so now it’s time to live in the present. Go day by day on your budgeting, do what you have control of now. If you focus on how much you have to save, or how little you feel like you can spend, the task becomes daunting. Instead focus on what you’re doing now, so every day you can have a victory. Do you have a big event or a big purchase coming up? Don’t think about how much you have to save, or how much money you’ll have to spend. Put away what you can for savings at the end of the day. Sometimes you’ll be surprised at how much you can devote to savings; some days it might just be the change in your pocket, but whatever the amount, you’ll still working towards your overall goal.

It’s very possible to stay out of debt. You’ve gotten this far and you can do even better. Life without debt is a journey and a learning experience. You may stumble at first, but never give up; it will only get easier and more fun.  Don’t make budgeting stressful, make it a stress reliever. And remember, you’re not alone. 

If you’re still struggling with debt, learn more about how FCS can help.