The last thing anyone wants is to fall into crippling debt. It stresses you out, it lowers your quality of life, and it doesn’t help that debt collectors will constantly be harassing you about payments. Luckily, it’s possible to avoid debt completely with smart management of your finances, but it’s not something that comes naturally. After all, if you don’t make mistakes and mishandle your finances at some point in life, then how you can ever know how to deal with it?


Luckily, there are plenty of resources on the internet (such as this article) that will help you maintain a good track record and keep you out of trouble. Managing your finances is easy once you get a hang of it, so without further ado, here are a few tips on how you can get a grip on your financial situation.



Proper Budgeting


If you aren’t already recording all of your income and expenses, then you’re doing yourself a disservice. Unless you want to end up bleeding money on multiple expenses every week, you need to keep track of everything you buy. The easiest way to do this is by using your smartphone. There are plenty of personal finance apps that will help you keep track of every penny that comes in and goes out of your bank account, and you’ll get a better idea of areas that you can save money on when you’re in a pinch.


Calculate Mandatory Expenses


Mandatory expenses cover everything from your phone bill to your mortgage. If you calculate these properly, then you could potentially save hundreds on your bills. For instance, if you calculate how much you pay for energy and how much power each of your electronic devices draws, then you might realise that by turning off your computer instead of putting it on standby could save you a significant amount of money. If you’re unsure how certain expenses, such as your mortgage, are calculated, then you can always refer to online help and calculate mortgage balance using simple online tools. Don’t forget that you can also switch providers for utilities in case there are better deals to be had.


Breaking Bad Habits


Everyone has bad spending habits. Be it a smoking addiction or an impulsive need for collectable toys, you need to cut down on luxury spending if you really want to get a grip on your financial situation and prevent yourself falling into debt. Only buy luxuries once in awhile and make sure you save as much money as possible before splashing a large amount of cash on something for personal entertainment rather than being mandatory to your lifestyle. If you plan on purchasing some items with your credit card, be sure to read this article for tips on how to make the most of your card to help you become more financially savvy!


Emergency Funds


Saving money without a purpose is stupid, but not saving money is also equally as stupid. A great way to calculate how much money you need to save is to take a look at your expenses, your job and your luxury spending and figure out how much money you will need to survive for six months without a job. This is called your emergency fund and you should never go too far above or below it.