9 Steps To Get Out Of Debt - Part 7

| Posted: 13-03-2006 | Comments: 0 | Views: 147 | Rating: (50)

(?)

Step 7 - Avoiding Future Debt

So far this series of articles has covered how to get out of debt. The remainder of the series will teach you how to stay out of debt, stop living paycheck to paycheck and how to start saving and investing for retirement. If you are still working on paying off your debt, feel free to read ahead because these are principals that can help you now, but I also recommend book-marking this page or printing it for future reference.

In this section we will be looking at how to stay out of debt. The easiest way to learn how to stay out of debt is to look at how you got into debt to begin with. For most of us it falls into one of two categories, or possibly both. The first category is by being impatient and spending too much. This is a real problem, especially with the current generation. We think we should have now what our parents worked 50 years to get. Easy access to credit cards has helped fuel this problem. Most of us get our first credit card around college age, when we're least prepared to handle them, and get into a habit of spending about 20% more than we earn each year. Quite often, we end up having to pay off items we no longer use or even own.

The second category is by unforeseen or unplanned-for circumstances. Sometimes, we use credit to fund a wedding, buy Christmas presents or other major events that we know were coming, but failed to plan for. Other times, it's unforeseen circumstances, such as a having to replace a household appliance or a car needing repairs. Regardless of the cause, there are steps you can take to protect yourself so you don't have to go into debt to cover them.

If your problem is the first category, my advice to you is simply quit it. If you see something you absolutely have to have, you can take the time to save up for it, instead of purchasing it on credit. You may think the second cause is unavoidable, but there is really a very simple solution: save up a safety buffer for unforeseen circumstances.

Most of us live paycheck to paycheck and anything at all going wrong that costs us some extra money can cause stress, panic and sometimes means that we'll be eating nothing but Ramen noodles for a few weeks. Having this extra savings buffer will help eliminate this stress and help you live a more stable lifestyle.

I recommend saving about $1,000 - $2,000 to begin with, and I also recommend placing it in a separate savings account, so you won't be tempted to spend it except for in emergencies. You want to be sure to keep this money in a savings account rather than investing it; that part will come later. If you were to place this money in a CD, you wouldn't be able to access it at the time of an emergency without taking a penalty on it. If you put it in another type of investment such as a mutual fund, the price may have fluctuated down to where it's now a bad time to sell your shares, at the very time you need the money, causing you to lose money on the investment. There may also be a waiting period for getting to this type of invested money. This buffer is for emergency use, and you need immediate access to the funds.

In addition to this emergency fund, you need to save for major purchases such as a car. If your current car is paid off and you're not actively making payments toward your other debts anymore, open a separate savings account and begin "making your car payment" into these savings accounts. If you do this for several years then when it's time to buy a car, you can take money out of this account to pay cash for it or at minimum, make a decent down-payment.

Rate this Article:

Current: 0 / 5 stars - 0 vote(s).

Article Tags: Credit Card, Debt Relief, Debt, Refinance, Get Out Of Debt

Article Source: http://www.articlesbase.com/finance-articles/9-steps-to-get-out-of-debt-part-7-18391.html

Print article

Send to friend

Publish this Article

Author feedback

About the Author:

This article has been provided courtesy of Destroy Debt. Destroy Debt offers great debt relief articles for reprint, and tools and advice that provide the debt help

Submitting articles has become one of the most popular means of generating quality backlinks and targeted traffic to your website. Join us today - It's Free!

Article Comments

Add new Comment

9 Steps To Get Out Of Debt - Part 4
By: Jeremy Zongker | 21/02/2006 | Finance
Free Finance articles for use on your Finance related website. Find articles of the subject of Finance

9 Steps To Get Out Of Debt - Part 8
By: Jeremy Zongker | 26/03/2006 | Finance
Free Finance articles for use on your Finance related website. Find articles of the subject of Finance

9 Steps To Get Out Of Debt - Part 9
By: Jeremy Zongker | 27/03/2006 | Finance
Free Finance articles for use on your Finance related website. Find articles of the subject of Finance

9 Steps To Get Out Of Debt - Part 5
By: Jeremy Zongker | 02/03/2006 | Finance
Free Finance articles for use on your Finance related website. Find articles of the subject of Finance

9 Steps To Get Out Of Debt - Part 3
By: Jeremy Zongker | 11/02/2006 | Finance
Free Finance articles for use on your Finance related website. Find articles of the subject of Finance

3 Ways Debt Elimination Software Can Help You Get Out of Debt
By: A.C. West | 09/07/2008 | Personal Finance

Simple Solutions for Getting out of Debt
By: Christina Costa | 26/08/2008 | Debt Consolidation
Debt Consolidation Articles - Debt consolidation entails taking out one loan to pay off many others. This is often done to secure a lower interest rate, secure a fixed interest rate or for the convenience of servicing only one loan.

Credit Card Debt Programs Can Be Helpful
By: Christina Costa | 16/09/2008 | Debt Consolidation
Debt Consolidation Articles - Debt consolidation entails taking out one loan to pay off many others. This is often done to secure a lower interest rate, secure a fixed interest rate or for the convenience of servicing only one loan.

Got a Question? Ask.

Ask the community a question about this article:

Frequently Asked Questions

DIRM _ Is there a mastercard called DIRM?
By: Cecil Brown | 09-09-2008
DIRM _ Is there a mastercard called DIRM?

Debt Reduction Services
By: egute | 09-09-2008
I'm looking for information about a debt reduction service company called Citigroup Financial Services. Trying to find out if this place is legite. I received a cold call.

Property when not married
By: kelsey | 07-09-2008
my fiancee' and I have been together for 10 yrs, though MD does not recognize Common law marriage. House is in his name, though since it's purchse, we split all expenses 50/50. His will indicates I would get the home if he died first. I fear his ex wife would attempt to take it for the children. Anything we can do to to assure this doesn't happen, short of getting married?

Done supporting my unemployed husband.
By: laura | 07-09-2008
I am involved in a Worker's Comp case. Will my soon to be ex-husband entitled to any of the money I recieve? What about long term disability monthly payments?

Extroverted! Interests in television commercials !
By: Betty | 06-09-2008
I'm extremely interested in television commercial ads. I would appreciate some good "starter's" advice on how to approach this persuance. Could you help me please? My thanks, Bette

I am a single Mom, with 2-part time jobs and ...
By: Msbabbles | 06-09-2008
I am a single Mom, with 2-part time jobs and trying to help my son through college? How do I handle an overwhelming amount of credit card debt?

Q&A Powered by:

Latest Finance Articles

Understanding Debt Consolidation Loans
By: Richard Greenwood | 07/10/2008
It can be all too easy to end up in debt and especially during the current times of financial uncertainty you may find yourself unable to make repayments. Consolidating your debt can make your debts easier to manage and lower your interest charges meaning you become debt free faster.

Credit Card Comparison
By: Richard Greenwood | 07/10/2008
Credit card offers are everywhere and all claim to out do each other. How do you cut through the marketing talk and understand the key features you need to compare to make an informed decision. Find out with this informative article on credit card comparison.

Shopping For Auto Insurance
By: Brenda Williams | 07/10/2008
When you get your license for the first time before you begin driving you need to get car insurance as it's mandatory to have car insurance while driving. Car insurance can be rather expensive, especially for new drivers which is why you'll need to ensure that you're getting the best...

Taking 100% Responsibility - the Prerequisite for Creating Money & Marriage Success
By: Leslie Cunningham | 07/10/2008
It's a simple concept, to refrain from blaming and complaining, and yet it's a challenge to change a habit, especially one that everyone else has. Like sticking to your diet, when everyone else around you is enjoying chocolate cake. Keep reading and you'll find out how this relates to your marriage and finances. Then I'll share some action steps to help you become 100% responsible for your life.

Retirement Income Investing and Your Portfolio
By: Steve Selengut | 07/10/2008
Brokerage firm monthly statements are designed to promote either fear or greed, depending on the current market environment. Nowhere on your statement can you find numbers that report your net investment, your total working capital, or your true asset allocation. Current and projected income numbers are given little attention

Buy to Let Investors Get a Boost
By: Parmdeep Vadesha | 06/10/2008
Buy to let UK investors are in a prime position to take advantage of a new government plan to spur property market activity. The scheme aims to permit property buyers to buy properties worth up to

How to Buy a Repossessed Property for Below Market Value
By: Parmdeep Vadesha | 06/10/2008
Buying a repossessed property is what matters for investors who are keen on reaping high profits. But even with the advantages it poses, there are certain aspects you need to be aware of before you start on the task of acquiring your next property cheaply.

Brits Should Ensure They Have the Cheapest Energy Supplier
By: Abbi Rouse | 06/10/2008
With energy prices escalating steadily, consumers could knock considerable amounts off their utility bills by switching from their areas default supplier.

More from Jeremy Zongker

20 Ways To Save On Your Utility Bills
By: Jeremy Zongker | 02/02/2008 | Finance
Utility bills can consume a very large portion of your paycheck. Wouldn't it be nice if you could pay 25-50% less on these bills? There's a number of ways you can. Don't worry you won't find any low flow toilets on this list! #1 Change your light bulbs - Compact florescent...

Credit Counseling Services
By: Jeremy Zongker | 04/05/2007 | Finance
Maybe you've gotten in over your head with your debt. It could be that you struggle paycheck to paycheck, and you're having trouble seeing the light at the end of the tunnel because you can't keep up with even the minimum payments let alone pay anything additional in order to...

Top 10 Ways To Save Money On Credit Cards
By: Jeremy Zongker | 03/10/2006 | Advice
The following tips are basic principles about obtaining and using credit cards that can save you some serious cash and keep you out of debt. 10.

Tips For Choosing A Credit Card
By: Jeremy Zongker | 03/10/2006 | Advice
Are you looking for that perfect credit card? If so, you may be confused about what exactly to look for in order to begin your credit card company comparison.

Top 5 Ways To Save Money On Gas
By: Jeremy Zongker | 06/08/2006 | Automotive
With gas prices across the nation at or near all time highs driving is becoming increasingly expensive. Everyone is looking for a way to save a little money on gas.

Prevent Identity Fraud When Using Credit Cards
By: Jeremy Zongker | 23/05/2006 | Advice
Don't wait until your identity has been "stolen" to worry about it. Identity fraud is a severe crime with serious repercussions that can take months or even years for victims to repair, not to mention hundreds to thousands of dollars.

9 Steps To Get Out Of Debt - Part 9
By: Jeremy Zongker | 27/03/2006 | Finance
Step 9 - Investing This is the last article in our series on how to get and stay out of debt.

9 Steps To Get Out Of Debt - Part 8
By: Jeremy Zongker | 26/03/2006 | Finance
Step 8 - Getting Insurance Most people are only one major disaster or a few weeks of unemployment away from bankruptcy.

Article Categories

Article Marketing

Article Notepad

Stop Duplicate Content

Term Papers

Need Help?

Sign up for our email newsletter

Receive updates, enter your email below

Use of this web site constitutes acceptance of the Terms Of Use and Privacy Policy | User published content is licensed under a Creative Commons License.
Copyright © 2005-2008 Free Articles by ArticlesBase.com, All rights reserved. (0.39, 16)

9 Steps To Get Out Of Debt - Part 7

Article Comments

Related Articles

Got a Question? Ask.

Latest Finance Articles

More from Jeremy Zongker

Need Help?

Site Links

Webmasters

Business Info

Sign up for our email newsletter