Finding A No-Nonsense Philosophy To Avoid Debt

[May 18, 2008.]

 

"How do I avoid debt?"

You are not alone in asking this question.  Millions of people across the country are searching for way to get out of their current debt or avoid it entirely.  With so many suffering from serious debt due to extravagant living and out of control credit card debt, it is not surprising that there is a host of "experts" standing in line to offer advice, strategies, and foolproof programs to help you manage your debt.  Just watch your television or browse the web.  They are everywhere.

Although there are some real frauds out there who are only looking to part you from more of your money, most debt management experts and consultants are not out to swindle their customers.   They are in the business to provide solid solutions and effective strategies to those who are suffering from monstrous debt or who desire to avoid the troubles of debt.

So many Americans are living paycheck to paycheck because they are either not spending responsibly or they are just trying to "live within their means."  In fact, many experts suggest the latter position should be the goal.  If you are living above your means, then you will obviously have serious problems with debt.  Yet, this method does not fully address the problem nor does it provide a solution that will actually keep you out debt should a need arise.  The reason for this is that you don't have enough money left over to put towards savings if you are living just within your income means.

There must be a better solution out there right?  Is there a no-nonsense philosophy to help you avoid debt?  Actually, yes there is something you might not have considered.  Have you thought about living below your means?  In other words, what you would be doing is living a frugal or cheap lifestyle.  You find the bargains; you avoid all of the unnecessary extravagances that are a normal part of the consumer-oriented culture in this country.  Do you have what it takes to live a cheap and frugal life?  If you do, then you can avoid debt and come out extra money in your savings account.

Frugality has been cited by many as a secret not only to avoid debt but also wealth.  It is not surprising that many of the world's rich did not get their money being big executives closing billion dollar deals and bringing home outrageous yearly salaries.  No, most millionaires are people who made the conscious decisions to live cheap and simplistic lives, while saving and investing their money.

Living below your means involves a strategy.  The heart of this strategy is your perspective on money and spending.  Simply put, if you see that you have the money to spend, you must decide if you should spend it or put it away.  The more money you put away the more you will have to access when you need it.  All of your decisions must be based upon this question.  You must spend less, filter your expenditures through a budget, and find out sources of income so that you always have a surplus.  If you have surplus funds you have no need to get into debt to make purchases.