Are you actively looking for ways to avoid or escape from a debt cycle?
Have you been exhausted with creditors knocking on your doors every month?
Do you know what would be the best way through which you can end your debt cycle?
Is there a way by which you can end all your credit card and payday debts easily?
If you have been asking yourself any of the above questions, you have landed on the right article. Having debt does not drain you financially, it also takes a toll on your mental health.
There have been numerous instances where people and families have been driven to extreme lengths because of a debt problem. Being debt-free ensures that you are always at peace emotionally. It also helps in improving relationships with near and dear ones.
In this article, one of the world’s leading financial advisory firms, Carina Advisors helps us overcome debt. In the following section, experts at the firm point out five key ways, which people can use to avoid debt.
Carina Advisors: List of the Top 5 Ways People can avoid Debt
1. Do not Overspend and Maintain a Monthly Budget:
If your expenditures are exceeding your income at any stage, you have a big problem. Overspending, especially when it comes to frivolous areas, should be avoided at all times. Debt cycles start when we start to spend on things, which we do not need as essentials.
Families and people should also get into the discipline of creating monthly budgets. This should be stuck to at all costs. From taking account of all the income to all the expenditures, a budget helps bring financial discipline.
2. Do not fall into the attractive trap of high-interest Credit Cards:
Rather than keep a credit card as a last resort for an emergency, a majority of us end up using it in the first instance. Credit card companies go to great lengths to offer cash back, points, free movie tickets, just to lure you into overspending.
If you have been successful in managing your credit card in a disciplined way, you will never fall into a debt trap. A majority of Americans suffer from high-interest credit card debts. It is advisable that credit card usage should always be done judiciously.
3. Do Not Lend Money to any and everyone:
Lending money to your near and dear ones is always a bad idea. People who borrow money get into a habit of thinking that someone or the other might bail them out. In most cases, you are never going to get your entire sum back.
We always try to set a period for when the person is going to pay us back. However, that rarely happens. To manage our expenditures, we end up using our credit card and pile on the interest rates.
By saying a stern, yet polite no, you help the other person be financially disciplined while protecting your own interests at the same time.
4. Seek out the Best Financial Advisor:
According to Carina Advisors, most financial advisors are out there to exploit clients. They point out that the best in the industry work with the clients in a humane fashion. It is important to understand the needs of the clients and offer a low-interest monthly rate of interest.
When people try to settle their debts, they are susceptible to bad agreements, which are unfair. Hence, it is best you go for reputed financial advisors and help them overcome your debt issues.
5. Start Saving for an Emergency Fund:
I only earn this much, how do you expect me to save? This is a common statement made by people, who do not want to save. Remember, saving is a habit. It is necessary that you set up a monthly saving plan.
It does not matter whether you are saving an amount as less as $10 USD. The intention is to get into a habit and make it part of your lifestyle. Once you do that over a period, you will see that you have set up a tidy emergency fund.
The cycle of debt is one of the worst experiences to go through. From breaking up families to bringing professional downfall, debt works in evil mysterious ways. Carina Advisors state that if we are able to follow the above five points, we will be in a better position to avoid debt.
Are there more ways that people can use in their everyday lives to avoid debt? Help us know in the comments section below.