How Can I Prevent Future Debt?
If you have managed to clear off any previous debts, you might feel incredibly proud of yourself, and rightly so. It can be quite difficult to get rid of debts, especially if you had several, or quite large amounts to pay off. However, just because you now don’t need to make repayments, that doesn’t mean you can become complacent. Instead, it could be a good idea to find ways to avoid future debt occurring.
While there is never a guarantee that you won’t need a loan or credit card again, you may be able to put yourself in a position where you can minimize the fallout.
Consider a Pension
It isn’t just the young and potentially naive who end up with serious debt problems. Those approaching the later stages of life may also run into financial difficulty or struggle to make repayments, especially when attempting to live without a guaranteed income. Investing in a personal pension while you are still working could help to make retired life a little bit easier. The amount you put in may seem trivially small now, especially if you have several decades to go until you stop working, but can easily grow to help you afford living, including some unexpected expenses, when you leave your profession.
Control Your Impulses
When you have money to spare, it can be tempting to buy yourself luxuries. This can become an addiction, and may lead to you being unable to pay the bills. In addition to this, some conditions can cause impulsive behavior, which you may struggle to regulate. Seeking help for impulsive behaviors may be required here in case there is an underlying condition. If not, you may be better off avoiding spending immediately, instead taking a few days to consider each purchase, whether it is genuinely needed or wanted, and how it could affect your finances.
Use Cash
When paying by card, it can be easy to ignore the amounts, up until a point where your card gets declined. While card payments may be more convenient, they could enable poor spending choices, which result in debt. Instead, you might want to consider withdrawing cash each day, giving yourself a reasonable allowance that will allow you to buy what you need, without running the risk of incurring any bank charges.
You may find that it is easier to see what you are spending. On top of this, paying with cash could give you pause, allowing you to consider any shopping you do, and keep your bank account safely in the clear.
Being in debt can be a struggle for people, both in terms of repayments and the stability of one’s mental health. By considering the ways that you can minimize the likelihood of debts growing, or appearing in future, you may be better equipped to live within your means. Having some form of savings can also be key, as you never know when an unexpected expense may occur.
Stop Worrying About Money and Regain Control
Join 5,000+ others to get access to free printables to help you manage your monthly bills, reduce expenses, pay off debt, and more. Receive just two emails per month with exclusive content to help you on your journey.