Many consumers succeed in living without any debt, but it is not an easy feat. Some dedicated savers even see results after committing to a spending fast or spending diet. People of a variety of ages and income levels have made this choice. This goes to show that if you put your mind to something, you can achieve it.
There are countless methods out there for consumers looking to cut spending, pay back debt, or avoid it altogether. The important thing is to select a system that works for you. You know what your weaknesses are, so choose wisely. Here are 3 ways to completely avoid incurring debt:
1. Work towards building large savings
It may be difficult, but it is also the surest way to stay out of debt. Think of your savings as preparation for unexpected expenses. This way, when medical bills or car repairs pop up, you won’t bat an eye. Saving is also essential for long-term expenses you might not even be planning for yet. Your savings will come in handy for more enjoyable purchases as well, such as an impromptu trip. Keep in mind that by living a life without loans, you will be cutting out a lot of monthly payments that other consumers take on, creating more room in your budget to maintain healthy savings.
2. Rent
Renting for life sounds like a nightmare to some people, but real estate is not cheap. If you are committed to staying debt-free, housing will likely be your biggest challenge. That said, saving up for a modest home is totally plausible for most middle-class Nigerians. Yes, it could take a long time, depending on your income level, but spending a number of years renting and saving could ultimately be a rewarding experience. Long-term renters know that this lifestyle has its challenges and frustrations, but there are fair landlords out there, and renter’s insurance is affordable. If you are single and living alone is out of your budget, perhaps due to living in a metropolitan area, consider renting a room or subletting until you can find an unusually good deal.
3. Buy only what you need
Impulse shoppers won’t like this one, but it’s amazing the amount of money that can be saved by practising one straightforward strategy: Think before you buy. In some cases, think very far in advance of buying. Research the best deals and practice listening to the little voice in your head that asks, “Do I actually need this?” Life costs money, but you can learn to have fun without spending a fortune. Like anything, it takes practice. If you know you are going to require strict guidelines to stay in the money-saving mindset, make an actual budget on paper and set reasonable rules for yourself.