Financial Review » How To Manage Debt and Save Money

Financial Review
How To Manage Debt and Save Money

Debt is something that has some sort of bearing on most people’s lives. In this day and age, it’s certainly not unusual to be in debt. For many, debt has very little impact on their lives as they are able to control and manage their debt and keep repayments at affordable levels. For others however, debt can cause stress, anxiety and unhappiness. It’s one of those things that if you don’t keep on top of it can spiral out of control. It is often said that debt is easy to get into but much harder to get out of.
These few tips are designed to help people manage their finances and avoid falling into debt:

1. Only buy what you need– it’s amazing how much money we waste on impulse purchases that we don’t actually need. It’s a habit that most of us can relate to, and most people could think of at least one item that they have purchased that went unused. People tend to fall into this trap when they have unspent money left over in their bank accounts. Rather than putting this money aside in a savings account, they feel as though the money has to be spent because the money is available in their account at that time. Before making any purchase, it’s a good idea to consider whether or not the purchase is really necessary. A good way of doing this is to give the item a mark out of 10 in terms of usefulness, considering whether or not the purchase is needed. If after careful consideration you still think the purchase is necessary then go ahead but you may be surprised at how often you decide that it might be better saving the money rather than splashing out.
2. Don’t over-stretch yourself financially– everybody likes nice things. Whilst there’s nothing wrong with luxury holidays and sports cars if you can afford them, loading your credit cards or taking out a personal loan to pay for them is not recommended and can lead to serious debt problems. If you are having to rely on credit cards and loans to pay for holidays and cars then the chances are that you can’t really afford them. Whilst it might seem tempting to stretch yourself financially, it is important to live within your means and if that means going without these luxury purchases then that’s what you should do. It would be a better idea to put money aside each month and save so that you can pay for these items without plunging yourself into debt. Another option is to look for cheaper alternatives; why not find a cheaper holiday closer to home or buy a slightly older version of the car you’ve been considering purchasing.

3. Get the best deals by comparing prices– Whether it’s on services that you pay for every month like gas and electricity or on one-off purchases like televisions or games consoles, it is important to spend some time comparing prices from a number of different retailers/providers to ensure you get the best deal possible. 
4. Stick to a budget – Creating a budget and sticking to it will be a practical help with your finances but it will also help you feel better too. Knowing what money you’ve got will help make you feel in control of your finances and lead to more peace of mind.
No debt problems are unsolvable. It might not be easy or quick, but there's always a route. And the earlier you deal with them, the easier they are to deal with.

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