If you’ve ever borrowed money, you know it seems great at first until the bills start arriving. When you realize how much interest you’re paying on top of the borrowed amount, you see how much money you might be throwing away. Planning ahead before taking on debt can leave you with more cash for things you really want.
Debt can quickly spiral into a never-ending cycle, as interest keeps piling up. Some people spend their whole lives trying to dig out from their debt. The best way to avoid this is to not go into debt in the first place. Here are some tips to help you manage without borrowing money.
First off, borrowing to pay off debt might make things worse. If you’re in serious financial trouble, look for help through non-profits and government programs that offer low or no-interest loans for essential living costs.
A great way to avoid borrowing is to pay for everything with cash. Credit cards make impulse purchases too easy, without considering the cost. Paying with cash makes spending more real and can curb those spur-of-the-moment buys that lead to debt.
Some people think they need a credit card for online shopping or hotel reservations, but that’s not true. You can use prepaid credit cards or set up a PayPal account linked to your bank. Many hotels will also accept a cash deposit instead of a credit card, which they’ll return if everything is in order at checkout.
Living within your means is crucial if you want to avoid borrowing. This means not spending more than what you earn each month. While it’s tempting to use credit to buy things immediately, saving up for items will save you money in the long run, as you won’t be paying interest. This approach allows you to keep more money in your pocket and eventually buy more of what you want.
The best strategy for buying what you want without borrowing is to save up and purchase things one at a time. Set both short-term and long-term goals, and create a saving and investment plan to achieve them without going into debt.
Though it might not seem like it initially, living without borrowing will enable you to buy more of what you desire and reduce stress over monthly credit card bills. Even big purchases like cars or homes can be made without borrowing by living within your means and saving consistently. This accumulated savings will be there for the things you need.
