Easy personal finance tips for debt proof living

Simple, easy changes to everyday personal finance habits can get you started on the road to debt proof living. Think Stock photo.

The best way to deal with debt problems is to avoid getting into debt. Too many people end up owing tens of thousands of dollars on credit cards, student loans or car loans. If you haven’t yet joined the crowd, there’s still time to adjust your personal financial behavior for debt proof living. When it comes to personal finance, some key actions can produce the best results. Identify and focus on those things. Avoiding debt problems could be as simple as becoming more financially literate about credit card debt, saving money and buying wholesale.

How to start debt proof living

One of the most basic tenets of financial literacy will help you the most: understanding credit card debt. Practical Money Skills talks about the “power of 50.” If you have a credit card with a $3,000 balance at 18 percent APR and pay only the 2 percent minimum monthly payment of $60 per month, it will take you 8 years to pay off your card. What’s worse, you will pay $5,780, not the $3,000 you figured you were spending when. But if you can pay an additional $50 per month for a total payment of $110 you will pay it faster and leave less money for the credit card company to charge interest on. The result: the debt is gone in 3 years and more than $1,800 in interest payments has been saved.

Saving money: start small and watch it add up

Saving money is easier than you think. Saving money for an emergency fund avoids debt if you need something like car repairs. Saving money to buy something instead of using a credit card means you will enjoy that something more. Succeed by starting small, recommends ehow.com. Every time you get a paycheck, put $20 into your savings account. You’ll be surprised at how quickly it adds up. Simple things like refilling your water bottle or brewing your own coffee can make a big difference. Add up how much you spend on bottles of water and coffee in a week. It’s amazing how much thicker your wallet can be.

Buy wholesale: cut out the middle man

By developing a wholesale mentality, you can take out the middle man before he takes his cut. Tips on buying wholesale to save money can be found at essortment.com. It can be as easy as calling local wholesalers and asking if they allow the general public to shop. Sample sales are a great way to buy wholesale. If you have friends who are interior designers, contractors or beauticians who can buy wholesale, offer to buy their lunch if you can go with them next time they shop. And always shop around. Sometimes a torn box is the only reason an item is marked down. Prices lower than wholesale can always be found if you do your detective work.