5.Staying Debt-Free
Once you get out of your credit card debt, it’s important not to get back into the habit of spending more than you make. The best way to do that is not to use credit cards at all. However, in today’s digital world, it’s nearly impossible to do. Without that credit, you’ve got no score, making it hard to get loans for cars, homes, personal needs, and more.
Therefore, be smart about using credit cards. Make sure that you have low interest rates and pay off the debt you incur each month to avoid a recurring bill. This is the best advice available, but it isn’t easy to do.
If you’re financially hurting right now, credit seems like the easiest way to help. However, paying the debt off later puts you in revolving debt, which is a challenge to get out of, as you’ve probably already seen.
Debt consolidation can take many forms, such as bankruptcy, balance transfers to low-interest cards, and taking out a loan sufficient to cover all other debts. Other than with bankruptcy, you have one monthly bill, hopefully with a lower interest rate than the rest.
Financial budgeting is essential, regardless of the path you choose. That way, you know what bills are coming due, how much you spend, and what’s left for entertainment. Just make sure that you include every expense, even those that are only paid every other month. It’s also important to factor in groceries, gasoline, and other incidentals. This truly helps you see where money goes and if there are corners that can be cut.
You can get and stay debt-free, but only if you work hard for it and know what to do.
