How to Avoid Going Into Debt

Have you ever wished for stress, sleepless nights and calls from strangers asking for money? No one does, but debt causes all these things and more. Find out the most common reasons for going into debt and how you can keep it from happening to you.

Student loan debt has never been higher in America and it is the only type of debt that cannot be discharged during a bankruptcy. There are many options for funding college instead of taking out a loan. College-sponsored scholarships and grants and work-study programs can cut the cost of tuition. Studying for the first two years at a community college can be significantly cheaper. Taking a year off after high school to work and save money is also worth considering.

• Make a shopping list and stick to it
• Learn how to cook so you'll enjoy dining at home
• Treat yourself to splurges so you'll be motivated to stick to your budget
• Buddy up with someone who's also committed to responsible spending

Are you living within your means or maintaining a lifestyle that depicts a salary beyond what you earn? Overspending is buying what you can't afford and it's a trap that will never lead to financial freedom. While it may be uncomfortable to pass up items you can't afford, the long-term reward is avoiding debt and living within your means.

No one likes to think about hospital bills or medical problems. While it's impossible to know what the future holds, there are some questions you can ask yourself or discuss with your significant other to keep a health crisis from also turning into a financial one:

• Do I have a high quality health insurance plan? If not, what can I do to change that?

• Do I have an emergency savings fund just in case? If not, how can I start saving a little every month to improve my situation?

• Am I doing what I can right now to live a healthy lifestyle, such as eating right, exercising and managing my stress? If not, what can I do to get back on track?

In a weak economy or a strong economy, job loss can quickly cause debt. Shopping feels good and creates a temporary distraction from the problem of not having a comfortable routine and meaningful work. How can you avoid debt after a job loss?

• Let friends know you're looking for work so they can help
• Polish up your resume and have your interview attire ready
• Look for free ways to spend your time (volunteering, community events, visiting museums and the public library, etc.) because you'll need a break from your job search
• Learn a new skill or hobby that will make you smile
• Remember that you are more than just a former employee but a whole person

Whether it’s student loan debt, credit card debt or the debt caused by a job loss, escaping debt is worth the effort. Taking the journey one step at a time will enable you to find your way to financial freedom.

Tell us how you did it in the comments section below.