Overburdening oneself with debt is one of the biggest tendencies of the working population nowadays as everyone in inflicted with this problem. Whether it’s the young graduates or those who are already in the workforce, money is spent even before it is earned in the form of interest payments and debt obligations. We all love the things that we want, this is called consumerism and there are two ways people deal with it nowadays. The first way is to go on a shopping spree that far outstretches what your wallet can afford you right now and accumulate debt in the process and the second way is that you shut out everything and become frugal. Both of them are flawed; one drowns you in debt and the other one leaves you feeling deprived. The correct manner to avoid debt and still buy skillfully is smart cash management which is a financial lifestyle with many nuances that if turned into a habit will not only enable you to buy a lot of things you want but also enable you to do that without feeling guilty of going overboard your budget. Here are 3 smart ways to avoid debt and manage your cash!
The positive credit card!
This is the biggest culprit when it comes to the initiators of debt accumulation on a person as the urge to buy increases manifold when you have the liberty to do it. We as humans, just like going overboard and not thinking about the future. However, there is a smarter way in which credit cards can be used to your benefit. Firstly choose a credit card that suits your needs, like if you fly a lot look for a credit card that rewards you with travel air miles readily. Keep cash back up for a lot of credit card transactions that you do, like when you go to your supermarket to buy up your monthly supply of eatables, do that on a credit card and have cash backup ready for it. Pay for the balance in less than 30 days and earn 0% interest rates on them all the while accumulating cash and other rewards that credit cards offer. Now that’s something that will enable you to spend more than you earn without getting into debt. It’s a smart cash management habit. Make it your own!
A lot of us get enticed after seeing those easy monthly installment plans on that shiny new car or that new 3D television we would just love to own. But hey wait, can you do it the other way round? To increase their market share, these companies which own items that have a large financial value, open up their items to those who can’t afford to make the payment for them outright through monthly installments. That’s how they make it seem gettable. We accumulate debt in that manner which we have to pay off no matter what and if we fail on it then we stand on the possibility of that thing being taken back.
Rather than paying the monthly installment, save for the same amount each month for yourself and when you have enough money, get the item. In this manner, you will save up on debt and extra interest costs a lot of money.
Earn more than you spend!
If you find yourself in a spending cycle that exceeds your earnings, then it’s time to earn more money. Get yourself a part-time job or do freelancing at home. Yes, it’s time-consuming and tiring but it sure is worth the effort to avoid making mole out of a mountain. That extra amount of money in debt each month will continue to grow if you don’t find a way to get rid of it and get the money to balance your financial position. Being frugal isn’t a way out of this as it will because you to become unhappy as you are forsaking a lot of things and compromising on your living standard. Make a business plan to pay off your debts as it is necessary. Find ways to reduce your debts if that is possible. If you’re a newly graduated student who has just entered the job market, you do need to find a manner to earn more and pay off student debt accumulated on you. It’s a smart cash management initiative that you must take to get just a little head start on those debts and keep them on a leash enabling you to live a happier and freedom-filled life.