How to stay away from debt?
Consistent behaviour, based on sound principles for the management of financial resources, should allow consumers to minimise the risk of failing to meet deadlines for repayment of their debts. Failure to meet these deadlines gives rise to debt servicing costs, which later increase. It is therefore a good idea to consider some basic advice on how to stay away from serious consequences.
How to manage your finances well
First of all, plan your household budget. Plan your expenses in detail and rationally, at least two months beforehand and preferably six months. For example, remember that it might be better to set your loan payments at a lower level and pay it back over a longer timeframe instead of threatening your household budget with instalments that are too high.
Never assume that your household budget will be supplemented with some additional funds, for example from unplanned orders for services, overtime or bonus, if you are not sure that this will occur. You must always assume that such an event will be delayed, which will be beyond your control.
Try not to spend all of the money that you have, try to create a financial buffer, even a small one, which will be a cushion for when your situation suddenly deteriorates. Profligacy leads to debt. Savings will make it easier for you to get through tougher times until your household budget stabilises and will let you maintain liquidity. The easiest way to save is to lower your electricity or water bills. Do not leave lights on if there is no one in the room. Do not leave water running if no one is using it. Remember that you are paying for all this!
Avoid unnecessarily borrowing money. If you are short a small amount, first forgo conveniences that overburden your budget. Moreover, you can always use the buffer mentioned earlier. If your case goes to debt recover, remember that a rapid response to a letter informing you of actions being taken is highly encouraged.