Debt is the worst word you can hear as an adult and it is something which none of us ever want to apply in our lives. But, as we know, life doesn’t always go the way we planned and we can often be left with debts after having no choice but to take out a loan. If you want to avoid falling into the trap of debt and you want to learn how to manage money better as a whole, here are some of the things you can think about.
It sounds ridiculously obvious, doesn’t it? The idea that to be financially stable we need to spend less than we earn… but a lot of us don’t realise this straight away and we don’t pay enough attention to our outgoings each month. Sit down at the end of the month and go through your bank statement. Write down what you earnt this month, and next to it write down how much money you spent on bills, food, and leisure. If you are spending far too much each month you need to consider cutting down our lifestyle costs, then your food, and finally seeing if you can find cheaper energy providers etc… all of this will give you extra money to save in order to avoid needing loans in the future.
Avoid debt… or pay it off
Debt is not something we want to deal with, however, if you do happen to come into debt at some point in your adult life you need to make sure you pay it off as a top priority. Think about looking at the best debt consolidation loan rates if you have larger debts or simply cutting costs of your lifestyle as we said above if you have smaller debts. Make sure you pay off the debts before you even think about buying coffee for work each day and cut down your food costs by meal prepping to allow you more money for the debt.
Say no if you can’t afford it!
If you can’t afford to pay for an activity with your friends or you don’t have the money to afford a new item of clothing, you need to make sure you say a firm no. When you can’t afford something and you do it anyway, you can end up in your overdraft which sets you back a lot with your finances and it can also impact on your saving. Be smart and only buy things you can genuinely afford and that you actually need or want.
Find cheaper ways to entertain
Entertainment is likely one of the biggest costs you fork out for each month because a lot of the time you end up going for drinks in your local bar and this can cost you a pretty penny if you do it every week. There are other ways you can have fun with friends and family: you can go for walks, have a picnic, go for afternoon tea, have movie and pizza nights… you can have fun without spending the earth. Make it your mission as a group to find the cheapest ways to have fun and this will help you massively when it comes to your finances.