How to Avoid Debt.

No one loves being in debt and no one goes looking for debt intentionally. Debt is one of the situations you just find yourself in without noticing.

You don’t get yourself in debt highly because your income does not meet your needs but simply because of your financial habits. Your relationship with money and how you handle money is what gets you in debt.

The financial choices you make day in day out drive you into debt. And if you are not intentional about these choices, you will drown in debt. You will find yourself in a situation where you borrow Peter to pay Paul and getting yourself in more and more debt. You will feel out of control and above all, you may never get to financial freedom.

Paying off debt is hard and it can take way too long that it took accumulating it.

However, staying out of debt is possible but needs high discipline when it comes to your financial habits and lifestyle choices.

Avoiding debt is basically being more intentional and in control of your financial habits.

Tips for avoiding debt.

There are so many ways you can avoid debt and the following habits when incorporated into your life will help make avoiding debt easier.

Use cash to pay for products and services whenever possible.

Using cash to pay for products and services is a good way to avoid overspending. With a credit card, money is easily available to spend and you are likely going to overspend.

With cash, you know how much you have with you and you will be able to limit yourself to goods or services enough for what you have at hand. It will limit you from the frequent card swipes deducting your savings or adding to the amount of money to be deducted for your credit annually.  

Using cash you have budgeted for will help you track the money that comes in and goes out as you are physically handling the money.

Also, paying with cash will help you avoid impulse buying as you are watching your money ‘disappear’ and want to hold onto it.  

Carry only the cash you can afford or have budgeted to use for shopping and use just that.

Avoid impulse buying.

Impulse buying is one thing that will drive you into debt very fast.

Invesp shows that 84% of all shoppers make impulse purchases.

Buying things just out of desire and not need will cost you. You will end up spending more money than you intended, disrupting your budget and ruining your saving plans. You will end up with little or no money to take care of your needs, resolving to borrowing or buying on credit increasing your credit debt.

Don’t buy stuff for the sake of buying or because there are offers you can’t resist. Also, avoid going for unplanned shopping trips as research shows that this increases the chances of impulse buying.

Avoid Shopping as a hobby.

According to Psychology Today, researchers found that 62% of shoppers have purchased something to cheer themselves up.

Research shows that a good number of people consider shopping as a way of getting them out of a bad mood and making them happy. It’s commonly referred to as “retail therapy”.

With the increase of online shopping, more people are shopping as a hobby and most of the shopping done is unplanned for.

Before buying something when you are stressed or feeling down, think of the financial implications.

Alternatively, consider doing something else that makes you happy apart from shopping.

If you can’t afford it without credit, don’t buy it.

If you cannot afford something unless you swipe off your credit card, don’t buy it. You don’t have the money for it and you are just adding to your credit when you swipe that card or borrow a quick loan from mobile creditors.

There is a street motto that says ‘if you cannot buy it twice with cash, you can’t afford it’. You could use this saying as your money rule.  

Another way is to save up for things you can’t afford at the moment instead of using credit to acquire them.

If you don’t need it, don’t want it.

In line with your lifestyle choices and money habits, you need to learn how to differentiate needs and wants.

Understanding the difference will help you easily cut-out the wants and focus on the needs only. Don’t spend on something you want before spending on something you need.

Put your needs first and forgo your wants to better your finances. So, when you go shopping, get what you need and avoid the things you don’t need.

Avoid ‘buy now, pay later’.

Most stores such as furniture and appliances stores have this type of paying plan. You buy now and pay later at once or in spread out installments. This is a debt trap and a good number of customers fall for this, don’t be among them.

You might think you can pay for it later but struggle to pay when the time comes. When you calculate the payment, ‘buy now, pay later’, comes with an interest and when you don’t pay at the specified time, interest increases. This is how you end up postponing and adding that debt.

Consider budgeting for items and manage the money you have at the moment. You might find yourself in so many ‘buy now, pay later’ arrangements pulling you into debt.

Consider waiting to get the item until you have the money to spend on it.

Compare prices when planning to make a major purchase.

Major purchases such as furniture, appliances, cars, houses, etc. can put you into debt.

Most of these things require a good amount of money to acquire them. Comparing the prices of different items available in the market will help you save some money.  

Some of these things might require you to borrow money to purchase them. In a case of mortgage or a car loan, comparing loan products will help you get the best loan fit for your finances and repayment ability.

If you don’t compare the prices of the items or the loan products, you might end up getting high end loans or paying too much for an item. You might end up struggling to pay up or spend money you would have rather saved.

Have an emergency account you can fall back on when there’s need.

Everyday life is unpredictable and some emergencies crop up and need to be financed. Things such as health issues, a tire burst, job loss, house repairs, etc. are unpredictable.

If you don’t have some savings set aside for such emergencies, you are likely going to result to borrowing to finance them. Borrowing throws you into debt regardless of where you are borrowing from – a friend, a personal lender, mobile creditors, etc.

You might lose your job or source of income and you will need money to cover your expenses.

It is safe to have an account with savings set aside for such cases so as to be financially ready when they come up.  

It’s always better with a budget.

For some reason, having a budget and sticking to it is your way out.

With a set budget, you know how much income comes in and how much money goes out through expenditure. You are more in control than when you are just spending whatever comes in without planning for it.

Working with a budget, will help you know what you can and can’t afford consistently. In case a time comes to cut off some expenses, you will easily know what to cut off.

Know all you necessities, saving plans, existing debt to pay off and budget for each. Let your budget fit your income to avoid outsourcing money to keep up with your expenses.  

Live below your wage – even in a case of income increase.

A good way to avoid debt is to live below your income to help you avoid keeping up with the Joneses and financing things you could do without.  

If there is always a cheaper option to what you want to get, whether a car, a house, furniture, etc. get it.

Living below your income will help you save up the extra money for later instead of spending it all. When you have extra money stashed in a savings account or an emergency account, you won’t go around borrowing money or swiping credit cards.


To avoid debt, you have to be intentional about it.

Spending is a popular temptation and if you can’t afford something, don’t get it and if you don’t need it, don’t get it.

Adjust your money habits and always be cautious of how you spend what you have.Avoid accessing money by credit or by borrowing with the perspective you will pay back later.

These tips will help you cut down the possibilities of getting into debt and better your finances as time goes by.