If you are concerned about debt, you're not alone — quite a few of us are. Even those individuals that don't have much debt are worried. And it's no wonder, everywhere we turn the media bombards us with the doom and gloom of the economy. You can effectively avoid debt by following these three simple rules:

Develop a Strategy

It does not matter where you are financially – If you have just a little or a mountain of debt, the easiest and quickest way to attack the problem is to create a budget. Develop a workable budget, one that fits your lifestyle and is easy to follow. The easier you make it, the easier it will be to stay on task. There are quite a few free applications on the Internet that makes creating a budget very simple: AceMoney Lite, Mint.com, FinancialFate.com, ClearCheckbook.com and GnuCash.org. Each and every one of these tools are very effective for implementing a budget.

Live Below Your Means

Break down all of your finances and examine every aspect excluding fixed payments like mortgages, rent, and vehicle loans, and discover ways that you can cut back on those expenses. Clip coupons for your groceries or switch to generic and store brands. Pack your lunch for work instead of eating out. Bring your own snacks instead of feeding money to the vending machines. Eliminate paid subscriptions to magazine and newspapers. Read magazine and news articles on the Internet instead.

Pay Bills on Time

Paying late penalties on past due payments is throwing away your hard-earned money. Each time you are late on a car payment, house note or the rent – fees are tacked on to those balances. These fees range from $25 to a certain percentage (usually ten percent) of what you owe. Add up all those penalty payments and that could’ve went towards grocery money or that much more toward paying down another debt such as credit cards.

Now that you've discovered how budgeting, living below your means and paying your bills on time can keep you out of debt, you have all of the knowledge you need to get your self out and stay out of debt. Click the link if you would like to read a 20 page booklet entitled
"Understanding Your FICO Score."