piggy bank saving

Being in debt is a normal thing for many people today, which has become quite an alarming cultural problem. Many of us get ourselves into debt to solve a short-term problem, or even just a whim. And what’s worse is that as difficult as it is to get out of debt, it’s too easy to incur it.

The average Filipino, for example, can avoid getting buried in debt by not incurring it in the first place. But how can you do that? Here are some tips for you:

1. Save money

Whether you want to save money as a college student or a minimum wage earner, there are lots of ways you can put away cash for rainy days. Consequently, you won’t have to get a loan if you need money for an unexpected expense or a personal wish.

2. Borrow wisely

Not all debt is bad. If you want to buy a house, you have to take out a housing loan if you can’t pay the entire amount. And it’s not just for housing. Incurring debt that will eventually lead to a pay-off, such as a small business or work abroad fees, is not seen as a negative type of debt. However, when the amount you borrow exceeds what you can realistically pay off in the future, that’s when it becomes a threat to your financial health.

3. Live within your means

One of the best ways you can avoid debt is to live within your means. Set a budget for your household and abide by it. Don’t buy things that you cannot afford just to make yourself feel better. If there is something you want badly, save for it instead of buying it with borrowed money.

Living within your means does not mean depriving yourself. If you want to be financially responsible and avoid incurring debt, always remember this tip for as long as you’re earning.

4. Carry cash

wallet with money

Don’t rack up your credit card debt. Whenever you go out, it’s a good practice to just bring cash and spend what you have. Leave your credit card at home.

5. Avoid certain offers

Walk away from ‘0% interest loans’ and ‘buy now, pay later’ promos. While these offers may seem like a good deal, they only postpone debt for the same amount.

6. Look for other options

For some people, they consider borrowing money as a “last resort” when in fact, they haven’t exhausted all the other options yet. Except for medical emergencies, there are not a lot of situations where borrowing money is the last resort. If you want to buy a car but can’t afford it, save money instead of getting a 0% down payment plan. If you want to buy a house that’s out of your budget, look for a better-paying job that can pay off your mortgage.

Even if you think that borrowing money is the only option left, there are probably a dozen other choices you haven’t tried yet.

Being in debt is a nightmare that you won’t want to experience. As early as now, use these tips to avoid debt and have a better financial future.

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