How To Keep Yourself Out Of Debt

When the financial crisis hit the US, many companies suddenly needed more cash in order to stay in business

. Companies like banks and other lending institutions needed to collect as much as they can from debtors, to use these payments as funding to ward off possible bankruptcy. As a result, people who obtained credit from these companies suddenly needed to pay off loans as creditors came knocking on their doors.

If you went through financial problems because of the recession, you probably know the hardship behind it. The loss of a stable job means drastic changes in a person"s financial status, and incoming debt collections only make the situation worse. At some point you probably thought of your spending habits and all the chances when you could"ve saved some money.

While no one can bring back the past, the good news is that we can still look to the future.

Debt settlement may be a problem for you now, but you can solve this issue altogether by staying debt-free later. The following are solutions that can help you stay debt-free.

Put the B-word back into your life

Debt settlement solutions revolve around budget planning and sticking to the plan. Some experts point out that people often forget to set up a planned budget, leading to overspending. Setting up a budget also means apportioning some of the money as savings. You can use whatever you save for any emergency that may need immediate attention.

Drastically cut back on credit card spending

Viable debt settlement solutions include cancelling all your credit cards except for one. By eliminating credit cards from your life, you eliminate the temptation to spend more than what you have. Here"s a word of caution, though. You still have to keep one card for any necessary expense that your savings may not be able to cover. In choosing which credit card to keep, consider the card with the lowest interest rates. This may save you on credit card fees.

Go back to the true meaning of living within your means

Debt settlement solutions include living within your means, because this is probably the most effective financial advice you can get. However, don"t fall for the idea that you can spend everything that you earn, because you can afford to. Living within your means implies planning wisely for every expense you encounter.

by: Ethel Schaaf

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