How To Remain Debt-Free

Remaining debt-free is not as hard as you may think. Getting debt free and staying debt free demands that you consider your expenditures more carefully before you make them. There - that's not so hard, is it?

This is not stay that you should allow yourself to become paralyzed by indecision every time you're thinking of buying something. It is only to say to take an honest look at whether you've budgeted for the item in question and, if you haven't, what makes it worth stepping outside of your budget to acquire it? Can you fit it in to next month's budget and just wait a few weeks to buy it? Is there some other part of your budget that you can trim for this month only in order to compensate for the extra expense?

Keep in mind as you start to take yourself through this process that the objective is not to deprive yourself or cause you to suffer - quite the contrary. The goal of all this is to make your life both easier and richer. (Literally!)

Answering these questions, incidentally, and keeping track of such expenses is made so much easier with Budget Forecaster from Strativia Software.

Getting and staying out of debt requires that you be judicious in your use of credit cards. Used heedlessly, credit cards can be the shovel with which you dig a deep financial hole it may take a lifetime to climb your way out of. A general rule is that if you cannot pay for the item in question IN FULL when the credit card bill comes in, then don't buy it. It's that simple.

For large purchases you could never afford to pay off with what you have left of one month's wages after subtracting all your other expenses, start a fund for this item. Save a little bit each month until you can buy whatever it is with cash!

Take a close look at the current state of your finances. What are your earnings? How much are your expenses? When you subtract your total expenses from your total net income, in the remainder a positive or negative number? These are the questions that will keep you from sinking into debt. You'd be well served to get into the habit of knowing the exact condition of your finances at any given moment throughout the month.

Another integral part of remaining free of debt is to balance your checkbook monthly like clockwork. Record all deposits, ATM withdrawals, debit/check card purchases, and checks in your ledger - diligently. Balance your checkbook against your monthly statement when it arrives and make sure you iron out any inconsistencies.

You can stow receipts in your wallet if you don't want to jot purchases down in your checkbook ledger at the counter, but only if you actually take them out when you get home and write them in then. If you don't honestly think you'll remember to do that (or you think you will remember but will get lazy and put it off until...never), then get into the habit now of entering all checking account transactions into your checkbook ledger the moment you complete the transaction.

The value of a personal budget cannot be overstated. Budget Forecaster makes it exceptionally easy, but whether you use software or an old-fashioned pencil and pad, create a budget and live by it. Don't permit yourself to get lazy during those particularly good times when you seem to have ample disposable income. Practice reasonable restraint at the checkout counter (real world or online) and keep a current and accurate tally of your financial activity. These two practices alone will assure you the greatest chances of getting and remaining debt free. 

Kenneth C. Kelly is the President of Strativia, a financial management software development and services company specializing in applications for personal and business use.  Strativia is the developer of Budget Forecaster, a sophisticated home budget and personal finance management software package.  Website: http://www.strativia.com/.  Contact: info@strativia.com.

Budgeting & Personal Finance