If you are an optimistic person, then you might agree with me that “A new year is a new beginning”. A new year means new goals, new resolutions, and new ambitions. Don’t stress, if you’ve made many financial mistakes in 2015. The new year will give you another opportunity to get a bundle of success. But, thinking positive is not enough, you must be organized and work hard.

If “debt” is the biggest problem that you want to get rid of, then you must adopt a frugal lifestyle to ditch your ruinous financial habits.

Here is a short list of Do’s and Don’ts to stay away from debt trouble. But before following these tips, you must get out of your existing debts.


Include your monthly budget in your smartphone

It is very important to create a monthly budget so that you can track your money flow. A well-planned budget will help you understand where to cut down unnecessary expenses. Thus, you can save a considerable amount of money each month. The additional money will help you to pay off outstanding debts. So, you must follow a budget or else, it'll be difficult for you to get rid of debts.

Read more - Master the art of budgeting: 8 Apps that make the task easy-peasy

Plan your meal to reduce restaurant visits

Food expense increases when you eat out a lot. Plan your meal better to stop eating out. You must visit the restaurant to eat your favorite dish, but that doesn’t mean you eat out every time. Reduce your eating out and experience a fatter wallet in coming days.

Read more - Nutrition made budget-friendly: Healthy food that appreciates wealth

Give couponing a shot

Yes, you must follow the mantra “shop less to stay away from debt”. But, that doesn’t mean you can’t buy anything! It means, to find ways to save money on daily expenses like groceries and other household things. Couponing is a great way to become an organized and balanced shopper. It allows you to shop your daily necessities within your budget. So, you must consider it.

Pay the higher interest cards first

You must be careful while dealing with multiple credit cards unless it causes credit card debt troubles. If you're already in trouble, then you should pay back the debts on higher-interest card first while making the minimum payment on the rest. Thus, the amount of debt payment decreases and you can save money in the long run.

Ditch your plastics

One of the major reasons for incurring debts is the excessive usage of credit cards. Many people can't manage their credit cards. Many times they even fail to track how much money they're spending. So, it's better that you don’t use multiple credit cards.

Make habit of using cash

People who tend to shop with their credit cards must keep cash instead of credit cards. Thus, they won’t end up buying unnecessary stuff. And, automatically the expenditure will reduce.

Put money into your savings account

You should set aside a certain amount of money in your savings account each month after meeting your daily expenses. The money in your savings account will give you extra support. You can use that money, according to your requirement like paying off outstanding debts.

Find additional sources of income

To pay off debts or save more money in savings accounts need extra cash than the amount that you earn. So, it's advisable to find out additional sources of income that you can manage with your regular job.


Don’t cross the credit limit

Crossing credit limit leads to massive fees. Yes, crossing the credit limit while shopping is one of the major financial blunders that create debt trouble. Once you start living a lavish life, you must pay for it in the long run.

Don’t miss any payment

Missing payments or making late payments can create a hazardous impact on your finances. Don’t forget about your due dates to stay away from debts. If you have a habit of forgetting about payments, then set an alert or ask your partner to remind you about the payments. You can automate the process as well. Once you get your salary, the payments will be deducted automatically. Thus, you’ll be able to avoid late fees and penalties.

Don’t announce retirement all of a sudden

If you’re thinking about retirement in 2016 without adequate savings, then think twice. Remember, many retirees accumulated debt in their retirement life due to poor financial planning. Without enough resources, you may fall into a debt trap as your expenses will increase later. So, talk to a financial advisor and calculate in a proper way to secure your retirement.

Read more - 401k and IRA major amendments in 2016 - Rules for retirement accounts

Final thoughts

Once I faced massive credit card debt troubles in my life. I also have student loan debt. But, I overcame those problems following some constructive ways. Now, I always try to follow these above tips to stay away from debts as I know once I've debts, it’s difficult to save money or achieve other financial goals. With a proper planning and determination, you can also keep yourself out of debt. Just move forward carefully, your future financial life will be brighter.

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