‘Keeping Debt At Bay’ | Independent Newspapers Limited
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‘Keeping Debt At Bay’

Posted: Mar 25, 2016 at 3:00 am   /   by   /   comments (0)


These are ways to keep your debt at bay.

Start With Small Debts to Help You Conquer the Big Ones

If you have a mountain of debt, studies show paying off the little debts can give you the confidence to tackle the larger ones. You know, like paying off a modest balance on a department store card before getting to the card with the bigger balance. Of course, we generally recommend chipping away at the card with the highest interest rate, but sometimes psyching yourself up is worth it.

Don’t Ever Cosign a Loan

If the borrower—your friend, family member, significant other, whoever—misses payments, your credit score will take a plunge, the lender can come after you for the money, and it will likely destroy your relationship. Plus, if the bank is requiring a cosigner, the bank doesn’t trust the person to make the payments.

Opt for Mortgage Payments Below 28% of Your Monthly Income


That’s a general rule of thumb when you’re trying to figure out how much house you can afford. Learn more about this number here. And then indulge in some voyeurism and see what other couples can afford.

How to Shop Smart

Evaluate Purchases by Cost Per Use

It may seem more financially responsible to buy a trendy N5 shirt than a basic N30 shirt—but only if you ignore the quality factor! When deciding if the latest tech toy, kitchen gadget, or apparel item is worth it, factor in how many times you’ll use it or wear it. For that matter, you can even consider cost per hour for experiences!

Spend on Experiences, Not Things

Putting your money toward purchases like a concert or a picnic in the park—instead of spending it on pricey material objects—gives you more happiness for your buck. The research says so.

Shop Solo

Ever have a friend declare, “That’s so cute on you! You have to get it!” for everything you try on? Save your socializing for a walk in the park, instead of a stroll through the mall, and treat shopping with serious attention.

Spend on the Real You—Not the Imaginary You

It’s easy to fall into the trap of buying for the person you want to be: chef, professional stylist, triathlete.

Ditch the Overdraft Protection

It sounds nice, but it’s actually a way for banks to tempt you to overspend, and then charge a fee for the privilege. Find out more about overdraft protection and other banking mistakes to avoid.