Advertisement

Simple tips that help you live debt-free

Simple tips that help you live debt-free
Getty Images

Getting into debt can be incredibly stressful. Constantly worrying about paying your debt while still having enough money to stay afloat can make you feel lost like you’re running in a never-ending maze. There are ways to stay out of debt, though. You can avoid these 15 money mistakes that are costing you thousands, learn 5 steps to avoid the credit card trap and even learn what rich people never ever buy to help you save a couple of bucks. You can also pick up these smart habits to help you live debt-free.

Set goals

Set goals
Getty Images

Having a plan means having a purpose. “[People] that lead healthy financial lives more often than not have clear financial goals and are actively working towards them,” says Yoni Dayan, chief editor of Money Under 30; he adds that “if you have a good ‘why’ to save, the ‘how’ will come much more naturally.”

Check out these wastes of money you don’t even think about.

Wait to buy

Wait to buy
Getty Images

“If you have trouble with impulse spending, waiting a few days is a great habit,” Joe Udo of blog Retire By 40 explains. “You may find a lower price or simply realise that you don’t need it after all.” While this is particularly helpful when it comes to big-ticket items, like a new TV or even a new car, it can also apply to everyday buys that can add up over time.

Don’t miss these almost effortless ways to save money.

Turn off auto pay

Turn off auto pay
Getty Images

Financial planner, Shannah Compton Game, recommends removing all auto-pay or auto-fill options on sites where you shop frequently. This forces you to “think about how much money you’re spending before you hit the ‘buy now’ button,” she says.

Don’t fall for these sneaky ways online retailers get you to spend more.

Pay as you go

Pay as you go
Getty Images

Surprise parties are great. Surprise bills are not. To avoid owing at the end of the month, Erica Gellerman, creator of The Worth Project, suggests treating your credit card like a debit card. “For example, if I swipe on lunch for $10 and gas for $40 I’ll use the credit card app on my phone that night to transfer $50 from my checking account,” she explains. “That way I’m not spending money that I don’t have.”

Discover the most trusted brands in Australia for wealth, prosperity and financial security.

Pre-pay your credit card

Pre-pay your credit card
Getty Images

This tip from Compton Game is pure genius: “Pre-pay your credit card for however much you’ve budgeted for the week for your expenses,” she advises. It will help keep your bank balance in check and stop you from spending money you don’t have.

Read on for the credit card rules you should never break.

Advertisement

Don’t carry a balance

Don’t carry a balance
Getty Images

There’s a two-word reason: interest payments. Udo says that when he uses credit cards, “I always make sure to pay the bill in full every month. I get all the convenience without having to pay interest to the bank.” If you can’t pay it all, a good rule of thumb is to never carry more than 30 per cent of your credit limit to the next month. Bonus: paying off your balance every month is a good way to boost your credit rating.

Use cash

Use cash
Getty Images

Another thing to consider if you find yourself holding a hefty credit card bill when the 31st rolls around, is to start paying with cash. Udo explains that not only does this make sure you’re living within your means but “the physical action of handing over cash to someone else is a lot more difficult than swiping a card.”

Don’t miss these money-saving tips that can be misleading.

Automate your savings

Automate your savings
Shutterstock

Remembering to set aside money each month is tough. Fortunately, financial planner, Sophia Bera, has a sneaky solution. “Automate your savings and retirement contributions so you don’t have to think about it yet you’re consistently making progress on your goals.”

Find inexpensive alternatives

Find inexpensive alternatives
Getty Images

More free time often involves spending more money, from brunch to happy hour to window shopping (which turns into actual shopping). “Nothing is wrong with these activities, but when I was doing them out of habit, I realised that so much of my spending was on things that I didn’t really care that much about,” Gellerman says. Now she keeps a list of budget-friendly activities to swap out for her pricier pastimes, like inviting friends over or going on a walk.

Here are some habits of cheapskates you can follow to save money.

Never miss a deal again - sign up now!

Connect with us:

Dear readers,
Please be advised that our shipment of the June issue of Reader’s Digest Asia in Hong Kong has been delayed by approximately seven days. We sincerely apologise for any inconvenience caused.
Kind regards, Reader’s Digest Editors