If you’ve been in credit card debt before, then you know all too well how hard it is to get out of debt. Of course, you don’t want to get into debt again. But sometimes, it’s far too easy to succumb to the convenience of putting everything on a credit card.
To prevent history from repeating itself, do everything possible to prevent yourself from getting into credit card debt. There’s no doubt you have it within you to establish good habits that will help you avoid debt.
Only use your credit cards to establish credit and get points that’ll get you something fun! But when you start to use them to buy whatever you want without paying them off, that’s when it’s time to put the breaks on.
Don’t let it get to that point when there are steps you can take to avoid it. Keep your finances in check and stay away from credit card debt by following these five steps!
1. Learn Positive Money Habits
Not everyone has a good relationship with money. If you’re struggling with using your credit cards too often, learn how to save instead of spend.
To do this, here are a few different things to try:
- Read personal finance tips on the internet.
- Join a finance tips group on Facebook.
- Find finance tips and topics on a site like Reddit.
- Read a few books by money experts.
Make an effort to be disciplined with money by establishing the right habits. Then you’ll avoid debt and be in a good situation with your finances!
And after educating yourself on how to maintain good spending habits, don’t stop. Continue to read up. That way, you’ll arm yourself with knowledge and be less likely to owe any credit card companies money.
2. Live Within Your Means
It’s convenient using a credit card to buy things. But if you start to spend more than what you’re making, it’s time to put the credit cards away.
Having enough money at the end of the month to pay it off is imperative. You’ll add debt if you ignore the fact that your spending is exceeding your salary.
Using a credit card only if you can pay it off is the best strategy. Otherwise, you can get yourself into trouble and a lot of debt.
Always remember to abide by the rule of living within your means!
3. Have Someone Keep You Accountable
Do you struggle with spending too much and sticking too much on credit cards? If that’s the case, consider asking someone to keep you on the straight and narrow.
Your accountability partner can urge you to pay off your credit cards each month (more on this next).
If you get off track, don’t get discouraged, but let your friend or significant other know what’s going on. They should be able to steer you in the right direction.
And, they can help you come up with a strategy that’ll prevent you from getting into debt.
4. Have a Zero Balance by the Time Your Payment is Due
Suppose you want to continue to build your credit by using a few credit cards each month. That’s great. But your goal should always be to have a zero balance when your credit card payment is due each month.
And, while we’re talking about paying off credit cards, be sure to pay on time each month.
Having a zero balance will prevent you from accruing interest. Plus, you have to admit it’ll feel incredible not having any debt hanging over your head!
So, pay off your credit card by its due date and pay it off in full every single month.
Give yourself a pep talk because you can make it happen!
5. Keep a Savings Account
Setting up a savings account should encourage you to save money instead of spend it.
Even if you can’t put a lot of money away, make a goal to put $100 or more in the account each month.
Putting some money away for a rainy day will give you some cushion. It’ll come in handy if you were to lose your job or experience an expensive hardship.
That way, if you do run into a bind, you can dip into your savings account instead of using a credit card.
No one ever said staying out of debt is easy, but things can spiral out of control if you don’t make an effort.
Create good habits now so you won’t have to spend months or even years paying off credit card debt.
When you look back one day at your financial decisions, you’ll be proud of yourself for saving for your future.