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How to Stay Out of Debt or Lessen It Quickly

Whether you are just finishing college and about to embark on your career, a newly married couple starting your lives together or are married with kids, it is never too late to take on healthy spending habits in order to stay out of debt. Here are some tips from www.carmaxfinance.co.uk on how to avoid debt or help get back on track if your debt is higher than you care to admit.

Have a Budget

Having a budget helps you to manage your money more wisely. Spending without knowing how much you spend each month is of course the reason you end up in debt. Planning a monthly budget allows you to keep track of your money and avoid over spending. You will know how much money you have coming in and how much is going out which will help you be more cautious as well as to pay your bills in atimely manner.

Best Savings Tips

Saving is something many people don’t include in their monthly budgets, but is it highly advisable to always include savings as part of your spending. If you are starting out it is the best time to be realistic about your monthly bills. Look at how much you make and be realistic about how much money you have towards rent or a mortgage payment each month. A realistic way to do this is multiply whatever you make each month by 32 percent. This number is how much you can afford per month and includes not only rent or mortgage payments but costs for electrical, water, taxes and heating. This should all be included in the number. If you are debt free sticking to this number will help you stay that way. Here are a few good money savings tips:

  • Bring your lunch to work.
  • Cut down on the amount of take away foods and dinners out.
  • Allot an entertainment budget monthly and if you are strapped do not use it. Instead put it into savings.
  • Spend on a need not want basis.
  • Save an allotted amount of money each month even if it is a small amount.
  • Cut down on those fancy coffees everyday.
  • Stop paying full price.
  • Use coupons and any money saved should go into your savings account, not spent on something else.
  • Don’t depend on money coming in such as an expected raise, bonus or return on taxes. Only spend money when you have it.
  • Look at transportation costs and consider using public transit if you drive to work everyday.

Consolidate Your Debt

If you already have debt and owe to several credit cards and banks consider consolidating your debt. You can speak to your bank about getting a single loan and pay off all of your debt at once. You can then have one manageable monthly payment. This will also cut down on the amount of money you are paying out on interest each month. Do this now, while your credit is in good standing to ensure you can get the loan. You can then reap the rewards of higher cash flow to add to your savings.

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