Debt is something that can creep up on you without you realising it. Whether you consider yourself to be money savvy or not, there are times when you end up spending more money than you have or needing to offset some payments to pay later.

For most people, debt is unavoidable, however, for the most part, it is something that you should try to keep at arm’s length when possible. Here are some helpful tips to avoid debt for a stress-free life.

Create a budget

First and foremost, create yourself a budget. This is imperative if you’re looking to stay on top of your finances. Often enough, when it comes to money troubles it’s down to not keeping track of what’s coming in and what’s going out.

If you’re spending too much, then you’re going to find yourself either living paycheck to paycheck or spending more than you’re actually bringing in as a household. Try to budget your money and where possible, create a spreadsheet. A spreadsheet helps keep everything in check and it’s a helpful perspective to see all of your outgoings in one place.

Never spend beyond your means

When it comes to living a debt-free life, it’s useful to try and have the attitude whereby you’re never spending beyond your means. Spending beyond your means will usually result in debt and serious debt at that.

Try to be careful about how much you’re spending and when it comes to your income, you should always have some money left over for savings or loose change. If you’re not, then chances are, you’re not saving.

Always have enough to pay off the balance

When it comes to accruing any debt, you want to aim to pay off the balance all at once. You should always have enough coming in to pay off the balance of debt that you’ve built up. Whether that’s from savings or a paycheck or two.

If the debt is becoming larger and more volatile, then you’ll want to consolidate all of this debt so you can get a handle on it sooner.

Know the difference between good debt and bad debt

There is good debt and bad debt in life. It’s worth knowing what is bad debt and how to stay away from it. Good debt, like a mortgage payment for example, is an investment and so long as nothing goes awry, it can often be a wonderful retirement plan or something to leave behind for the kids.

Have a rainy day fund

Finally, if you haven’t already got one, start saving into a rainy day fund. This is a great type of savings account for those times when things are getting a little tight or you’ve suddenly come into some money problems.

Everyone should aim to have a rainy day fund as it can be a great way to provide some peace of mind, even if the worst should happen.

Avoiding debt is something to aim for in life, so use these tips to keep you out of the red.