Don’t be afraid of credit cards. Credit cards help build your credit, and can be helpful if utilised properly. Do not rely on credit cards to pay your bills or even to get necessities. Use it to fill your gas tank up once a month, and then put it away the rest of the time. Or, set up an auto-pay on something like a gym membership – around £50 is a good number. Pay the balance off – in full – each month.
Tip: If you’re going to get a credit card, be sure to get a no-fee rewards card!
Always be on time. Pay your bills when they’re due, or even before they’re due if your pay schedule is different than your bill payment schedule is. If you’re paid once a month, it is easiest to pay everything at once – but when you get smaller paycheques each week, it can be more difficult. Having to use more than one paycheques for rent or mortgage can seem daunting. Paying even a few pounds ahead at a time can help relieve a little stress.
For example, if your rent is £600 a month, paying £200 a week (instead of £150) will get you ahead by a whole month in just a few months. Staying ahead of the curve is key to staying out of debt.
Pay yourself first. Building an emergency fund is a must – no matter what your income is like. Anything can happen at any time, and having that safety net could be the difference between keeping and losing your home. Off the top of your paycheque, take at least 10% to put into savings.
Budget like you’re broke. Even if you get a raise at work, that’s no reason to start spending more money! Staying out of debt means spending below your means. Set a budget, a tight one, and stick to it. If you want to treat yourself to dinner, that’s fine – but don’t make a habit of it! Those £40 meals can really add up fast. Plus, you could be putting that £40 towards your emergency fund.
Set goals and achieve them. Setting goals is important, but writing them down is even more important. For some reason, writing goals down makes it more realistic for me. Grab a piece of paper (or get creative and make a vision board!), and write down your goals. If you want to be specific, you can even write each step you need to take to reach each goal.
Don’t splurge on holidays. We all like to go all out when it comes to birthdays and holidays, but there’s no need! Learn how to afford Christmas when you can’t afford Christmas. Use coupons to buy gifts at a discount and stock up year-round, or try your hand at making some of your own.
Be patient. While buying the fancy phone right now might seem like a good idea, it’s an impulse buy. Know what I know about impulse buys? They get you in debt – fast. I can’t count how many people I know that have filed bankruptcy over impulse buys that added up over the years. It’s just not worth it. Wait a few months and save up. The price will go down by the time you have enough money, and you’ll save a pretty penny in the meantime.
