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12 Best & Easiest Ways to Stay Out of Debt

12 Best & Easiest Ways to Stay Out of Debt
Diana Star Feb 26, 2019
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best ways to stay out of debtStaying out of debt has become somehow impossible to most if not all people. And there’s a good reason for this. Money is usually never enough and that’s why borrowing more and more money is a norm for many.

Falling into the debt trap is very easy, but the same can’t be said about getting out of it. Then again, can one really get out of the bottomless pit of debt?

Answering this in the affirmative would be a straight-up, downright lie. Debt can never be a problem once you steer clear from it. Prevention is better than cure – or so the saying goes.

Debt is an unbearable burden. Whether it weighs down your integrity or bank account, it can leave you depressed for the rest of your life. When you repay your dues, you’re ridding yourself of a tarnished name and all the negativity that comes with it.

Unfortunately, most individuals continue to make their burden heavier as they continue to borrow more than they repay.

Considering a huge part of our lives revolves around finances (groceries, mortgage, gasoline, insurance premiums, etc.), it gets a little hard to do without borrowing every once in a while. While some may argue that debt is inevitable, it’s actually not.

There are more ways than one to sidestep financial obligations right before they get the best of you and your finances. Here’s a list of what you need to know.

1. Ensure You Have a Budget Plan in Place

When most people hear the word ‘budget’, the first thing that strikes their mind is deprivation – which should not always be the case.

Budgets help in tracking your income and expenses. The more you do it, the more you learn how to make good choices when it comes to spending. And the more frugal you become, the lesser your debts will be.

Over the next month, track your spending wisely. Figure out how much you make each month from your income. The total amount is what you’ll have to deal with every month. Spend more than that, and you risk sinking deeper into debt.

You may discover that you can’t keep various costs as low as you hoped you would, or you won’t need as much as you thought you would.

At the end of the first month, tweak the numbers around to keep your budget realistic. It is paramount for you to know where your income goes as well as how much you make on a monthly basis. Otherwise, you don’t stand a chance of getting out of debt.

As long as you keep a periodical budget, ensure you make continuous progress towards your debt-payoff goals as well as your savings.

2. Limit Your Credit or Debit Card Use

Did you know that only 14% of Americans don’t use credit or debit cards for their everyday purchases? There are numerous benefits of opting to use cash rather than swiping your card. A significant advantage of using money is the fact that you get to save more than you would with a credit/debit card.

Carrying around plastic money only gives you the idea of spending more and more. This is a proven fact. When having, for instance, $100 at hand, you may even think twice about handing it to the cashier.

It hurts worse to part with a handful of notes than it does to swipe a card over the counter. According to studies, you can spend approximately 47% more when using a credit card than you would when using cash.

Just because there’s something you want (not need) to buy, doesn’t give you enough reason to use your credit card. If you know very well you can’t afford to pay off the balance, don’t, under any circumstance, use your credit card. This is the surest way to mess up your credit score and get into debt all at once.

These are just a few reasons as to why you should keep your credit card far from you, especially if you’re trying to steer clear of any debt.

3. Cut Back on Entertainment

As far as personal finance is concerned, it’s not all about the saving and budgeting. Spending on things that keep your mind relaxed is also worth considering. The problem comes about when determining what classifies as entertainment and what doesn’t.

How much should you spend on entertainment in the first place? You don’t need that Netflix subscription to survive, but it sure does add some thrill to your life.

You may or may not regard it as a necessity, but entertainment should never be a higher priority than your bills.

The following are legit ways to save big on entertainment:

  • Don’t rely so much on what your friends are into. Paying extra cash for stuff you don’t enjoy is equivalent to flashing your dollar bills down the drain.
  • Minimize your spending on the tons of entertainment at your disposal. There’s no point in paying for Amazon Prime, Hulu, and Netflix when you primarily use HBO Go.
  • Be clear on what’s worth your dollar and what isn’t. Cut back on activities you engage in but don’t enjoy (e.g going to concerts), and devote your resources to what you really love (e.g visiting the museum).
  • Figure out ways to ‘frugal hack’ your entire entertainment budget. One way is to find the best deal on anything entertainment-related. If you want to eat, Groupon has you covered. Want to attend a concert? Goldstar’s got your back.
  • Share memberships with a friend or family. For instance, memberships on Amazon Prime start at $99 annually. Members can share their benefits with their friends or family at no cost. For approximately $50 each, you can enjoy cheaper access to TV and movie streaming, Kindle books and Prime shipping.

We all love relaxing, watching TV and basically having a good time with our families. Entertainment should definitely be a part of your budget – though it should be realistic, reasonable, and take into account the rest of your financial goals.

4. Be Careful Not to Borrow More Than You Can Repay

We’ve all borrowed a certain amount of money at one point in our lives. The borrowed money either catered for a special event, a critical emergency or purchase larger items beyond our financial capability.

Prior to making commitments from your friend or your bank, it’s imperatively necessary that you be a hundred and one percent sure that you can keep up the repayments.

Failure to this will lead to something more than un-repayable debt; you risk losing your home, being taken to court, or worse, your valuable possessions being auctioned.

Borrowing is grouped into four categories:

  • Secured / Homeowner
  • Unsecured / Personal
  • Overdraft (further categorized into authorized and non-authorized)
  • Credit Card

Educating yourself on each of these types of borrowing will give you a clue on how to borrow the right way. Doing so will help you avoid some of the most common borrowing-related problems, the major one being falling into a debt spiral.

Each time you borrow cash, keep in mind that you’re putting your finances at risk. Sometimes we even impose the unnecessary repayment burdens on ourselves, like when racking up credit/debit card debt on unnecessary purchases.

5. If You Can’t Afford it, Don’t Bother

Simply put, live within your means. What this means is that you shouldn’t spend more than what you can afford. Unfortunately, for today’s peer-pressured generation, it’s easier said than done.

Loans, savings, credit cards and surprisingly even emergency funds are means to buy more stuff that stretches beyond your regular income. You should know by now that this kind of extravagant lifestyle isn’t sustainable in any way.

Your wasteful spending is bound to catch up with you at some point. Your access to credit and savings will be no more, forcing you to make a critical turnaround or suffer financial ruin. It doesn’t have to come to this.

Start by being aware of your average income. You can then cut down on your spending in a way that goes in line with what you make. If you’re still spending more than you earn, that’s a clear sign that you need to have more than one source of income.

6. Adopt a Less-Costly, More Frugal Lifestyle

Being frugal gives consumers the option of spending their money on the things they value while simultaneously saving on those they don’t.

Frugality gives you a sense of freedom as you will get a rough idea on how spending more on some areas is holding you back from achieving results in others.

Contrary to most beliefs, adopting a frugal lifestyle doesn’t deprive you of what you love. It actually has tonnes of benefits.

It’s all about making your spending more worthwhile and striking a balance between what you want and what you need. One may reason that giving in to the mindset of a consumer is hard to avoid at a time when deals and ads constantly bombard consumers.

Now, more than ever, you should quit making frequent visits to the store and start buying in bulk. Use shop sales and coupons and visit sites such as Groupon to save on entertainment.

With coupons, you can set aside a considerable deal of money every month on your grocery budget. There will be zero need for borrowing cash when you adopt the habit of spending less and in turn saving more for emergencies.

If you’re a newbie to couponing, there are tonnes of useful and handy apps you can use to get cash back returns as well as increase your savings each time you go shopping.

 7.  Save More Than You Spend

Still, on the subject of savings, this is the best way you can avoid getting into debt. Having a lifetime’s worth of savings assures you of financial security in case of any spontaneous expenses.

Your level of financial preparedness will depend on how much you’ve been able to put aside. Once you’ve committed yourself to live within your means, you should be well-able to boost your savings rate by squeezing more cash from your budget.

An alternative way of finding extra opportunities to put something substantial aside is checking all your credit card statements. If you’re not sure how to handle this, services like Truebill and Trim can help you out.

Doing this will help you collect spare change on a weekly basis or better yet, trim your budget by taking $10 from unnecessary expenses. Even though what you save by the end of the month is not really worth saving, it can make a huge difference later on.

That dollar or two can go into your savings account or emergency fund. Over time, it’s sure to add up to a big round figure. Whenever a pressing issue arises, taking a credit card loan will be the last thing on your mind.

8. Pay Your Bills on Time

If you’re in the habit of paying your bills too late, the late fees can have an impact on your finances in the long run. Most companies, from utilities to credit card issuers, slap you with outrageous fees that could add up to thousands of dollars.

This money could have otherwise been used to cater to something more beneficial.

If the worst comes to the worst, set up a bill reminder to ensure it never slips your mind. There are lots of financial applications that can remind you of any unsettled bills. A couple of them are more general, while others can be set up in your finance software.

These are well-known free-to-use sites that you can to set up all your bill payment reminders:


By using, you can receive bill reminders straight to your inbox or smartphone. Log in to your Mint account and click ‘Add a reminder.’ The site suggests that you set reminders based on each of your most recent transactions.

2. Google Calendar

Google calendar is a common preference when it comes to pay bill reminders. You can choose to receive a reminder pop up or have it emailed to your inbox. Fill in all the necessary details, including the amount and the receiver, and you’re good to go.

3. What Bills?

Use What Bills? to keep track of all your transactions. This web-based reminder indicates what you’ve paid already and those that are due any time.

Sure, we all have busy schedules and get swamped most of the time. It’s easy to forget about the multitude of bills that need to be paid off. This should not get in the way of clearing your dues at the right time.

9. Do Price Comparisons Before Making Major Purchases

This may be common sense to some, but hopping from one online or retail store to another can keep you from spending massive amounts of money. You don’t have to buy the item right away. Better yet, buy a similar product for a more reasonable price.

It’s often quite challenging to find a high-quality product at an affordable price. If you do more of online shopping than retail, you’ll notice that the rates are relatively lower.

Through comprehensive comparisons of specific product features, technologies and specifications, one can make a sound, affordable decision. If you wish to buy a new car, for instance, compare some makes and models, then settle for the one that’s in line with your budget.

Several comparison websites offer product reviews. Read through what customers who have already used the item have to say about it to ensure you don’t waste your money.

10. Have More Than One Income Stream

If you wish to live out your desired lifestyle, be ready to work really hard for it. Having two, three or more income streams can supplement your shopping needs.

You’ve probably heard that the average millionaire operates approximately seven income streams. Whether it’s true or not, why not try having several of your own? The best part about having more than one income stream is that when one fails, you’ll not suffer any losses – especially if your savings are intact.

The following are the most common ways you can use to create passive income:

  • Affiliate marketing via active websites or blogs
  • Create your own blog. If you can’t, buy one instead
  • If you’re into photography, sell your photos on iStockphoto or Shutterstock
  • Create long-term passive income by publishing an ebook
  • Make daily / weekly YouTube videos
  • Design an exclusive website where you sell your products or services
  • Collect reward points on travel or shopping cards

These are just a few of the many activities you can do to add to your income. Working your way towards a more sustainable lifestyle may be hard, but the outcome is worth living for.

What’s more, the more engaged you are, there will rarely be any time to engage in stuff that will draw your back financially. If possible, your second job should be higher paying to make ends meet.

Of course, you’re not getting an extra job to fund your extravagant lifestyle. Instead, work towards paying all your accruing debts and relevant expenses.

11. Work Towards a Specific Goal

A huge part of staying out of debt is working while having a purpose for doing what you do. Having something to look forward to gives you a sense of motivation. We all believe in working towards a specific goal, but most of us rarely put this into action.

Strive to have both long and short term financial goals. Much as we may not admit it, we only work because we have to. Take some time and think about what you’d like to achieve in the future.

Life goals can be as small or as big as you like. Goals that inspire you to sacrifice temporary pleasures for a lasting, debt-free lifestyle. Don’t, however, make money goals your primary objective over everything else in life.

Having a clear balance between your goals and your needs can help you to make sound financial decisions. As you work to fulfill your goal(s), you’re also working to sustain yourself for a better future.

With financial goals as your motivation to work harder each day, you’ll not fall into financial temptations and end up with a huge burden of debt on your shoulders.

12. Adapt to Every Change in Your Personal and Financial Life

A major aspect of being financially successful and leading a debt-free life is going with the flow. As you make a drastic turnaround in your life for the better, you’re destined to go through stuff – good, and bad in equal measure.

It’s essential for you to stay on track and adjust relevantly to the situation. You may plan to quit something dangerous like taking loans in the next five years, but you still find yourself borrowing money soon after. Is it worth reverting to your old lifestyle?

Not at all. The best you can do right now is to make the most sensible financial decisions irrespective of your financial upbringing, age or gender.

Find a way to make do with what you have and use it in a way that will be beneficial to your life. In essence, be ready to make lemonade from the hundred of lemons life gives you.

Ready to Live a Debt-Free Life?

As mentioned earlier, leading a money-conscious lifestyle in this day and age cannot be achieved overnight. There are lots of temptations all around you, and you’ll need to try your best to avoid them like the bad plague they are.

Staying out of debt requires a solid game plan backed by a ton of self-control and motivation.

Living debt-free is an awe-inspiring, life-changing process that teaches you more about yourself and most importantly, your finances. Identify the poor habits that made you a slave to debt in the first place.

Rectify them with the few tips above and work your way out of your temporary predicament without adding more weight to your already unbearable burden. Once you finally erase the bold ‘debt’ tag on your forehead, by all means, try not to have it rewritten.

Rather than taking credit card loans to splurge on overpriced items, compare prices online and buy quality goods at more affordable rates.

Diana Star

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