Breaking Away From Debt

Incurring debts is not a difficult task at all. After all, who could resist the almost irresistible urge to buy a new outfit, a high-tech gizmo or just to try out the newest restaurant around the corner? The power to purchase is so easy to wield. It is the control to curb the temptation to buy that is a challenge.

While it may be true that it is not a sin to indulge every so often, it is also one's responsibility to take control and responsibility of his finances. What good is there in owning a top-of-the line car or a fancy cellular phone when you're always looking over your shoulder to check if creditors are literally running after you? Always remember that no amount flashy material possessions can ever compare to the joys of having a peaceful mind and a clean credit history. Being debt-free is definitely the way to go. Having said that, we have prepared rules on how you can live a life free of debt.

Get real. It's fun to live a fantasy life every so often, to just throw your credit cares to the world and buy as if there is no tomorrow. However, there IS a tomorrow and irresponsible purchasing can dampen a prospective bright future. Thus, never live beyond your means. It is a fact that credit companies now give cards to those who spend beyond what they can earn because they will rake in money from the interest rates. Would you give away your hard-earned cash to creditors rather than using it for yourself? Think about it.

Make a budget. This may sound complicated but once you get the hang of it, it becomes quite easy. Write down all your expenses for the day so you can figure out where exactly your money is going to. This will help you determine areas you can cut back on for savings. Keep it simple so you don't end up confusing yourself even further.

Identify your income. After making a budget, list down your sources of income to know just how much money you have. How much does your paycheck amount to per month? Do you get an allowance and if so, how much? List it down to the last centavo to get a clear picture of your financial footing.

Compare. Now that you have a list of your expenses and your actual income, you can see for yourself if you are living beyond your means. If you're not then good for you! But if not, then it's about time to address the matter before it gets blown out of proportion. The solution can be summarized in three words - tighten the belt.

Save up. Tuck at least 10% of your monthly income away for that rainy day. At least you'll have some cash to tide you over until the next windfall.

Dave Reynolds writes on a number of different subjects, from autos and personal finance to gadgets, laptop skins, games, and electronics.

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