How to Stay Out of Debt

by · 18 comments

Returning to familiar territory after a period of absence can bring back a flood of memories. Some are good, others might be bad but these mental pictures almost always generate a new perspective to the whole situation.

For many that were successful in getting out of debt, the struggles and the stress of paying high interests month after month will undoubtedly keep them from dipping back into the red. But for those of us who have trouble ignoring the temptation of easy credit, what advice do you have to give?

If you can do it all over again, how will you keep yourself from digging? Do you have any stories to share?

I’m relieved to say that I don’t have any personal ones, but while we are at it, here are a few points to think about if you are already at the verge of diving into the sea of debt.

  1. Is It Really Worth the Trouble – Most of us get into debt because we forget that we have to pay back the money we borrow. Credit card companies are awesome at helping hide the inevitable. Grace period, minimum payments and a lack of total interests paid are just some of the tactics they use. Before you make the purchase, think about whether it’s really worth paying interests for. Are you getting a return for your money? Or is this purchase just another emotional bandage?
  2. Think of Your Family – Do you really want to tell your family that you bought ANOTHER new phone? AND with borrowed money? Accountability can work wonders.
  3. Past Experience – Hopefully not many people fall into this category, but perhaps horrifying nightmares about past debt are the only way to keep you from overspending. When you need to borrow, seriously think about what you went through in the past. Most of the time, you probably realize that it’s not worth the stress.
  4. Don’t Go Too Deep Even If You Dive – Fortunately, I’m currently debt free, but I will need to borrow soon. I’m not joking, but don’t worry because I haven’t gone mad. I just mean that I will be getting a mortgage when I buy my first house. You may think that’s called good debt, but like I mentioned before, debt is debt is debt. When you owe money, it doesn’t matter why because you need to pay back principal plus interests. If I over borrowed for the house, it is just as bad as over borrowing for anything else. Be responsible with the loan amount, or be ready for the consequences.
  5. Hearing Other Stories – Maybe. Just maybe, some of you will stay out of debt just by listening to other people’s frustration when they were in debt. If you have any stories about past experiences or any tips on how you stayed out of debt, please help each other out by sharing. If you do, more than one innocent lives could be saved.
Money Saving Tip: An incredibly effective way to save more is to reduce your monthly Internet and TV costs. Click here for the current AT&T DSL and U-VERSE promotion codes and promos and see if you can save more money every month from now on.

{ read the comments below or add one }

  • Oscar Morzan says:

    Hello! I am in the middle of my almost 7 year debt reduction plan. Yes, a 7 year plan, and I have been sold with the different options to pay off debt, snowball, lower to higher balances, higher to lower interest rates, etc.

    The question I have is that I don’t find too many articles about how people manage to conquer the temptation of using the extra money, and use it for something else. We, debt paying people live frugally, rice and beans if you know what I mean, “gazelle intensity” , and all of the sudden now we are in the middle of snowballing, and we are paying $600-700 dollars when the minimum payment is only $193.00. How do you handle that temptation?

    • MoneyNing says:

      I’m not sure how everyone handles the situation, but first you should realize that your debt is money you owe, and that the minimum payment is exactly what it is, the MINIMUM you should pay.

      If you owe money to your friend, I’m sure it will be uncomfortable if instead of paying him/her back, you spend it on, say, a new TV. Though owing money to a company is slightly different, the numbers still work the same way. Do you want to spend it so you can be a debt slave longer, or do you want to become debt free so you actually own stuff that you can afford later? There’s really no magic, and that’s probably perhaps why you don’t read articles on how people concur the temptation because they don’t think it’s tempting to get further into debt with money they still don’t have.

  • Kaleb says:

    I don’t even understand how anyone can get into debt. I’ve never been in debt because as a child I saved up my money for college so I would have enough to pay for it. My grandma was also nice enough to help pay the difference. I realise not everyone would be able to have a family help them pay for something like college / university but is it really that hard to save money?

    I’m a bit disgusted when people say they are bad with money and can’t save yet there they are buying $200 pairs of jeans. If people would stop putting such a value on materialistic unecessary things then less people would be in debt. Oh well I guess I can just laugh at everyone because I know what’s good to spend my money on and I don’t need a lot of things to get by in life.

  • gino says:

    There are so many ways to dig yourself out of debt. And it is always unfortunate when debt happens. There are people who can help though.

  • Donavon says:

    It really is a matter of seeing your finance figure and the state of mind you are in.

    It took me a family squabble to see that your money is really your responsibility no matter how much you need to save or spend. Being in debt means “You actually can’t afford it.” that’s why you borrow other people’s money to buy.

    So banks tell you it’s healthy ( for them it’s healthy to lend people money because they earn double when you pay back ).

    For you it is definitely not healthy.

    Here is how I got myself out……….
    “Squeeze everything I have to go debt free”

    I’m lucky to have a mentor who has total discipline on life.
    Everything from Life to Work.

    I calculated over and over again until I could find no other areas that need spending in the near future. Then minus the expenditures that I have listed out.
    Hell ….. There is no room for paying back borrowed money. And that means when I borrow there is no means of paying back. So why borrow and dig your own grave ?

    Credit Cards? hmmmm………. done that ….. when you don’t have enough to pay back, you don’t even have any to save. And that actually means ????
    It’s how you see that changes how you monitor your money. Fairly simple.
    ” Ah… but you don’t understand …… ” Really ? Who doesn’t understand ?

    • Donavon says:

      Try to lend people money and charge them on minimal interest. When they don’t pay or ask for grace period, what will you do next ?

  • Wilson Pon says:

    I used to be in the situation, where I owed over ten grands of debts, Ning. Honestly, it’s a very tough life and after I’ve free from the debt, I don’t want to look back on it anymore….

  • says:

    What keeps me motivated is not the pains of the past but the prospect of the future. Several years ago I saw a PBS special titled Can You Afford To Retire, this really made me think about my future and how I am possibly going to manage.

    The evidence is clear that Social Security will not be there. Events of the last few decades show that pension promises are easily broken when companies go out of business (United Airlines and GM to name a couple.).

    I don’t want to be a burden on society or my kids, so if no one else is going to provide for my retirement than I must.

  • Financial Samurai says:

    All I can say is, THANK GOODNESS for return policies. Every time I buy something, I sit on it for at least a week before really deciding to buy. In the meantime, I stare at my mounting CC bill and it often helps me return the item.

  • Jessica says:

    The best way to stay out of debt is to use your credit cards minimally-this is especially true for people who do not have much control over their spending habits. You could also approach the person whom you owe money to, be it a bank or your friend, and find out if there is any way you can make smaller payments over an extended period. This will prevent you from borrowing from Paul to pay Peter.

  • Lee says:

    This rung a bell with me. Two weeks ago I wrote a post titled “Is Debt Worth It?” (my blog is still so new I don’t think anyone noticed). It touches on a lot of what you’ve written, and being one of those who are still in debt (but working damn hard to get out of it), you might find it interesting:



  • David@DINKS Finance says:

    Debt sucks, but if I would have followed Dave Ramsey’s advice I would STILL be saving up to go to my first semester of college.

    Being completely out of debt at all times is completely impossible. Controlling necessary debt is key, though. If you don’t NEED it or it won’t increase your income, don’t go into debt for it.

  • Thicken My Wallet says:

    Is it possible to even not be in debt in this day in age? I don’t think debt is either a good or bad thing. It has no meaning in and of itself. Isn’t the question really how do you control debt?

    • Jones says:

      Society has brainwashed us into thinking that debt is necessary when it’s in fact not. It should be “how I am going to get out of debt” rather than “how I am going to manage my debt”.

      Everyone has it misunderstood. Debt is not good no matter how you slice it.

    • Gary says:

      Thicken My Wallet,

      Yes, it’s possible to be debt free in this day and age. Just like it’s possible to be a non-smoker and in great shape in this day and age.

      But, you will be in the minority and will need to live a different (and better) lifestyle.

      You think debt is neither bad nor good? How much debt are you carrying and how much interest do you pay each month?

      You don’t control debt my friend. Debt controls you.

      Sydney, Australia

  • Charles says:

    Getting out of debt takes hard work and without motivation, you will never get anywhere. I started by mapping out a 3-year plan and sticking to it. I found that it was conservative because in those 3 years, I got small raises that added to my ability to pay off debt.

    Now, I’m debt free and I’m glad I stuck with the plan, even when it was sometimes hard to keep up. Discipline is key.

    • Charles says:

      I re-read my comment and saw that I wrote about getting out of debt instead of staying out.

      I think just remembering how hard it was, the sacrifices I made to get out was enough for me to “stay out”.

      For those that aren’t into debt yet, consider yourself lucky.

    • Donavon says:

      I agree with you on Discipline.. the key answer to all successes…. without which is the fall of all empires…… It is such a simple word but so difficult work with.

      In the end….. it is discipline that teach us so much…

Leave a Comment