Consumer financial literacy has become a major focus for the consumer credit information industry. Our newest contributing writer Allen Smith offers Three Basic Tips to avoid over indebtedness:  

Are you making sufficient income? Do you save a part of your income every month? If yes, then there is no need to worry about future. But, if you don’t save, you should start it immediately so that you do not fall into debt problems. If you’re in a situation when you have already fallen into debt trap, you may use your savings to come out of it.

3 Ways to save money and stay away from debt problems

Read on to know the 3 ways how you can save money and stay away from unnecessary debt problems.

  1. Grow the habit of savings – Just like it’s important to earn money, similarly it is equally essential to grow the habit of savings. When you have enough savings, you need not have to worry about the rainy days. But, when you do not have savings, you will be worried always about your future. Also, without proper savings, you’ll find it difficult to overcome emergency situations. Savings will also help you get rid of debt worries, if you’ve incurred any.
  1. Cut down the credit cards – While having credit cards is a necessity, you should not swipe them always to make several purchases at a time. When you do so, you’ll fall into credit card debt trap for sure. You will then have to use your savings to eliminate credit card dues. It’s suggested that you cut down your credit cards and do not even think of using them, unless emergency.
  1. Know your exact needs – If you have a lot of money in your hands, it does not mean that you should spend it lavishly by buying things needlessly. This is a very bad habit of spending your money. You should know your exact needs and spend money only on purchasing those items. If you’ve the habit of spending money on luxuries, you should do away with them. You’ll be able to avoid incurring debt problems.

These are some ways that will help you save money so that you can stay away from debt problems.

Allen 1“About the Author: Allen is a financial writer and blogger. He works in a CA based Law Firm. You can follow him in his personal blog: Toxic Finance