Say no to the deep end: Ways to prevent debt from ruining lives

4 smart ways to avoid extreme debt in your 20s.


how to avoid debt

In video games like The Sims franchise, the concept of money is loosely based on actual currency. Players begin with a measly amount at the start of the game and build up their wealth by working. Reality stops there since players who don’t want to grind can easily open the cheats tab and input ‘motherlode.’ This instantly grants them more money.

Real life isn’t as easy. It is true for various people working in Media, Entertainment and Gaming industry. Even Animation and VFX artists also somewhere struggle to make balance with their artistic skills and salary package. The only ‘cheat system’ we have are loans and debts. If we aren’t careful, we run the risk of things going wrong even in our 20s. Although it’s possible to reverse such negative effects by going into debt counseling somewhere in Sudbury.

Still, it doesn’t have to go that far. While we’re young, we should follow these tips to avoid going neck deep in dept:

Pay with cash:

Credit cards can become a double-edged sword if we aren’t cautious. On one side, they allow us to make easy payments without having to worry about cash at that moment. They can also help increase our credit scores.

The other side provides how these benefits can be our downfall. Considering how high the credit limit can be on some cards, we might get tempted to splurge on things we don’t really need. Even tiny purchases hurt our savings if we continue making them.

This doesn’t mean that we shouldn’t carry cards, since they are good for emergencies. But it’s best to maintain the habit of paying with cash whenever we can. Doing so allows us to keep track of our monthly budget, and prevents us from buying things we can’t truly afford.

Never stop budgeting:

Budgeting money is a useful skill that many of us were taught at a young age. But, somehow it lacks who are more inclined towards the creative skills and similar jobs. What we have learned over the years is more crucial now that we’re adults with more responsibilities and bills to pay.

Salary wise, it’s best to follow the 50-30-20 rule when we receive our post-tax income.

Created by Elizabeth Warren, this rule basically says that 50 percent of our income should be used on necessities. 30 percent can be spent on things we want, while the remaining 20 should go into savings.

Keep a fund for rainy days:

Emergencies are called emergencies because they appear unexpectedly. When they happen in our lives, it’s best if we aren’t caught off guard financially. This means putting away some cash in case something bad occurs. It’s like you save coins for some urgent buys in various online and offline games.

If a person is following the 50-30-20 rule, this means setting aside the 10 percent in the 50 meant for needs. While it’s unlikely that an emergency will happen in the near future, it doesn’t hurt to be prepared. Doing so means allowing our future selves to worry about anything but money in the event that something does happen.

Pay debt on time:

Those of us who attended university likely applied for financial aid programs to help pay for fees. A system that is frequently is student loans. We’ve heard horror stories of such loans haunting people into their 40s. A way to prevent this from happening is by diligently paying off whatever we owe the government. While it may not seem relevant now, we’ll breathe easier in the future since we have less to worry about.

It’s the same with credit card debt. Anything that we purchased with our cards should be paid for immediately. This prevents our debt from accumulating. It also helps our credit score.

Keeping these tips in mind not completely prevent people from incurring debt. But it does teach us helpful values when it comes to money. Most of which we’ll be able to use well within our old age.


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