Many people think that financial problems only affect salaried people. This is not the case: many entrepreneurs incur debts, which should be avoided by following management guidelines.
If you want to avoid debt, here are some very interesting tips.
How to avoid debts
Many times it’s not just about money, but about financial education. Unfortunately, this much-needed education is not taught in schools; You learn through experience. We learn what to spend and how to do it , and many of these lessons are learned after having faced us with our own economic chaos .
Whether you have resorted to loans or if you are thinking about them, you should take into account various tips or factors that can help you in day-to-day finances.
Make sure you have more income than expenses
It may seem obvious, but there are many people who don’t understand it or don’t want to see it. The problem is not having a control of the expenses and in a short time having debts “without waiting for it”. To spend less, you must write down all your expenses on one sheet and estimate the average monthly expenditure to know what you are investing in your salary.
Saving as a measure to avoid debts
After making a comparison of expenses and income, saving is vital to achieve the long-awaited financial freedom. It is advisable to assume a fixed and continuous percentage, month by month, which, for example, reaches 30% of all your income. This money saved should only be used for unexpected situations or take advantage of real and beneficial opportunities.
Fight against any kind of leverage
In this case we do not only refer to the debts that you can incur with any financial entity . Also with third parties, who lend you the money and, although they do not impose interest on you, this type of credit perpetuates a vicious circle: leverage, that is, gradually getting into debt until you reach an unsustainable situation.
Study when to ask for a loan and when not to do it
It is not always necessary to ask for a loan. Therefore, you must analyze in all cases when it is convenient to borrow capital . For example, having external financing would be productive to buy a good such as a car, a house or an appliance. But it would not be suitable for the payment of vacations or to buy a luxurious good that you do not need.
Finally, it is vital that you apply in compliance with these tips to avoid debt. Thanks to them you can uncheck yourself of future problems with financial institutions and also with the return of outstanding loans. It is, in short, to use common sense and not contradict that universal norm that stipulates that there is no surplus without savings.