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What is the best way to stay out of debt? If you ask a prudent financial manager, the answer most certainly would be to avoid borrowing in the first place. While this is a utopian dream, in today's tough and uncertain economic condition, it may not be always possible to stay out of debt. However, we can certainly take steps to ensure that our debts are under a tight leash.
One of the main reasons why people fail to stay out of debt is because they are not very disciplined in taking care of their money. Of the many ways and means by which we can be free of debt, getting rid of credit cards is the best starting point. Credit cards are malevolent and unless they are used very carefully, they are bound to devour individuals and sink them in heaps of debts within a short period of time. The revolving credit facility that is offered on credit cards is a monster and if you are married and love your wife and family, you should run miles away from the practice of paying monthly minimum dues. Research has shown that hardly 2 to 3% people have been able to pay their credit card debts through the revolving credit card system.
The next important thing that could be very useful in helping a person to stay out of debt is to have a tight control in one's spending habits. The best way would be to follow some useful and helpful tips. The day we receive our salaries, we should set apart 10% of the same towards savings. However tough the situation may be, we should develop this habit. This will help us in two ways. First, it will help us to learn to stay within budgets and also help us stay out of debt. Secondly, over a period of time, we would be seeing these drops of savings grow into a big tree which could be very useful when our hair starts graying and when we are nearing the end of our active economical and financial lives.