5 More Tips for Staying Out of Debt
5 More Tips for Staying Out of Debt in 2019
We care about your financial well-being. We recently published “5 Tips for Staying Out of Debt,” and as a result, discovered some more opportunities for you to keep your debts to a minimum. Here are five more tips to help you stay out of debt:
1. Don’t Borrow Money to Get Out of Debt
It might sound simple, but this is a common problem that can trip people up on their journey to financial freedom. Be careful not to accrue more debt than you can handle. After consolidating new debt, avoid taking on more and don’t create any unnecessary or new debt. Get organized and make no debt your new goal.
2. Never Co-Sign a Loan
Co-signing on a loan might seem like a way to help a loved one at the time, but if it does not get paid off, it could be detrimental to both of your financial situations, and possibly even your relationship. Co-signing means that you are willing to take equal responsibility for the loan as if it was your own debt if it is not paid. Even with the best of intentions, it is financially safer for all parties to avoid this and instead help that person to save more money to the point that they will not require a co-signer.
3. Avoid Payday Loans
While payday lenders make their product seem very tempting to “help you out of a bad situation,” resist the temptation to take on a payday loan. Interest rates are usually very high, even up to 35% interest. You can quickly fall into the trap of gaining new debt each month to cover past debts. It can easily become a trap to bury you in debt. We want you to have a successful financial future, so stay safe and don’t get a payday loan.
4. Avoid Including Debt from Your Old Car Loan to a New Car Loan
It’s important to try to sell your car yourself before getting a new loan on a new car. Because a car’s value depreciates rapidly, dealers often receive your vehicle for a lower-than-market price and then include the negative balance into your new car loan. Then you will owe more than your car is worth which is negative equity. Don’t make this mistake.
5. Don’t Ignore Your Debts
Do not ignore your debt! Sometimes, they say, ignorance is bliss, but in the case of debt, ignoring it will compound more problems in the future. Ignoring your debt could result in higher interest rates and surcharges, bad credit scores, court demands, even wage garnishment. Don’t procrastinate – address your debt from the start.