5 Essential Debt Prevention Tips

Debt is as dangerous as quicksand, and in many of the same ways. The problem with debt is that it tends to snowball out of control. Once you have one foot into bed, then comes the additional credit, late payments, higher interest rates, and before you know it you are sinking in a quicksand of sand! The best way to beat debt is to stay out of it altogether. Below I will mention some of the most common ways people find themselves stuck in debt and how you can prevent it.

The cardinal rule in personal finance is that you should never spend more money than you earn. Sounds fairly simple, right? You’d be surprised by how few people heed this advice. We aren’t even discussing the importance of retirement and saving for your future. That is certainly important as well, however, it all starts with avoiding all types of debt.

Development finance brokers have become somewhat popular the last few years as we see the global economy bouncing back. There are many that have collected valuable properties during the real estate bust a few years back and those properties are beginning to skyrocket. That means a lot of people are looking for money to develop those properties so they can rent or sell them. Using a development finance broker helps you to ensure that you have adequate capital based on the value of your property.

Never underestimate the importance of the cash only lifestyle! Too often consumers are overly concerned with credit rewards. The problem with credit card rewards is that people falsely believe that they are making money when they carry a balance on their cards. Rewards only benefit those that pay off their monthly balances in full. Instead of rewards cards, if you carry a monthly balance on a credit card then you should be looking at zero fee and zero interest balance transfer offers so that you can quickly pay down your debt.

Sometimes people are fooled into thinking that there are “good” types of debt, often called consumer debt. This can include an auto loan or a mortgage. Truth be told, if you have to finance a vehicle then you should instead take the bus, walk, or save up enough to pay for the automobile in cash. Also, a mortgage is often necessary because of the sheer amount of buying a house. Though you shouldn’t consider buying a house if you have anything less than 20% to put down on it.