How to never get into debt?

Question

I'm going to be moving out of the house in 2 years for college and I'm about to get a job at Six Flags. I need advice and tips on how to never get into debt. Thanks.

Answer 1

I'm impressed with your planning on this issue. That in itself will go a long way toward never getting into debt. Proper respect for money even when you don't have a lot is very important. Here's some simple advice that works...

1. Pay off credit card bills in full each month. If you find you can't do this, stop using them. Credit card payments is a vicious cycle - there's evidence all over Yahoo Answers to back this up. Try to NEVER pay any interest on a credit card bill.

2. Save 10% of every paycheck. If you can't do this, you need to figure out how to reduce expenses by moving into a cheaper place, trading a car with a loan for a car you can pay in full, getting rid of the cell phone, cable TV, stop dining out - whatever.

3. Plan for major expenses and save (above the 10% you're saving) until you can pay for it. Don't get sucked in by the "monthly payment of only..." ads. Try to never have monthly payments on anything except a house.

4. Don't ever try to fool people into thinking you make more or have more money than you do. In fact, it's usually better if you and everyone else believes you're broke.

Answer 2

Well, the way I did it, and it did take a while but did it - is you need to know EXACTLY what money is coming in and what is going out. Even if it's just a pound or a penny.

You see, saving money is about HABIT and it is about your attitude towards your life. Many get money and go and spend because it just makes them feel good. Even a pound in their pocket, they will be itching to spend it. So sometimes, saving or spending has to do with the emotions a person feels about themselves and knowing what they want in life.

So let's start on how I did it:

1. Start small. First get a book, a note pad that has a hardback cover. Now, open it put these titles:

Income

From where income came

Spent

On what

Total.


Draw lines on this note pad to seperate these titles. Now, everytime you get money, put it down. Whenever you spend ANYTHING put it down.

Your goal is to make a plan of saving for a full money or two. Start small because when you see the total, it gives you encouragement, belief.

Also, when you write everything down, you're not living like most mediocre people, the masses - who spend and say:

"I just don't know where the money all goes."

You want to KNOW exactly where it comes from and goes.

Now, your old habits might come in, whispering to you, to spend. Treat yourself. Don't. Not yet. Have a goal. Have an idea what your saving for.

The world mate starts not with millions. It starts with a penny. It is the small things that add up later on in a month, a year, five years that gets people. So don't think, these pennies and pounds you save are little. They are not.

Why? You're just saving. You are actually following the first rule of success. SAVING and crafting the habit of saving your money. This saving is an investment in your life, and your attitude to life.

So, let's recap:

1. Get a book.

2. Add the titles and seperate them with ruler and pen, to draw some lines.

3. Whenever you get money or whatever you spend on bills, etc, put it down.

4. Every week or month, sit down and look at it all. And..

SMILE. It maybe just 50 dollars or 50 pounds you saved but you did the first step. Keep going and it will be 200 and then 500 and in a year, it can be more,

It's all about organising your life. It took me a while because i knew it was about shaping my habits and program in my mind I have been living with for years. It was a little fight in me but it is this that makes people stay broke.

Raise your value in your life. Organise it, save money for future possibilities or a rainy day.

Plus, if you have any things you don't want then sell them. Put them on ebay.

Answer 3

Governments get into debt the same way anyone or anything gets into debt. They spend more money than they take in. Other countries and private individuals hold the debt. They loan the money. printing more money simply devalues the currency (there is only a fixed value of production and service, and thus more money divides the value of that per unit to a lot less), and results in inflation (the money is worth less so things cost more). It has the benefit of making the value of the debt much less, by decreasing the value of the currency, but also screws the vast majority fo the population, because their incomes do not increase at the same rate as inflation, and everyone then becomes poorer. A lot of revolutions have resulted from governments printing way to much money. people tend to get really irritated when they become poorer because of irresponsible government.

Answer 4

I don't want to dampen your spirits, but realistically "never" getting into debt is not an option. -Education expenses, car notes, and mortgages are just a few examples of debt. However, since you are attending college there are a few things to watch out for...creditors love college students so beware.
Somethings that helped me....
1. Create a budget and stick to it. Keep a daily log on what you spend your money on. Be frugal!
2. Differentiate between wants and needs. If you don't have the money to pay for it -decide if you really need it.
3. Find other ways to cut cost and save money.
*If you still need to borrow, carefully assess you financial situation, determine what goals you are trying to achieve and your ability to repay. Apply for credit sparingly and beware of acquiring too much debt too fast.
Hope this helped and good luck on your endeavors.

Answer 5

Some simple rules for staying out of debt:
1. Get rid of any and all of your credit cards. If you can't pay cash, then you don't need it.
2. Spend wisely. Don't buy anything that you do not absolutely need.
3. Start a budget, and stick to it. Only the government can get away with spending more than it makes.

Answer 6

stay away from credit cards. Some people will tell you to use credit cards for emergancy only. I say save up six months expenses for an emergancy and stay away from credit cards. If you play with snakes you will get bit. live on less than you make.

check out daveramsey.com and listen to his talk radio show. Lots of good advice on money and debt.

Answer 7

Live within your budget. Never charge anything that you cannot afford to pay it off when he bill comes. Use credit card for emergency only. Never keep a balance on your credit cards.

Answer 8

dont buy anything on credit. If you do, pay it off every month. Open a savings account for those big unexpected expenses.

Answer 9

don't keep up with your peers / classmates. don't spend more than you make or have. if you can't afford something, don't buy, if you really want it, then walk away and start save up until you have enough, then buy it with all cash.

Answer 10

Neither a borrower nor a lender be.