The same applies to debts: prevention is better than cure. Once you get into debt, you often have to pay interest. Your fixed costs will rise anyway, because you will have to pay off the debt that you have built up. Can you prevent debts, then this too! That way you make it easier for yourself to keep your income and expenses under control.
Preventing debts is done first by having your household budget in order. If you do not know exactly how much is coming in and how much is going out, it is difficult to determine your financial room. So first list what is coming in every month and what you spend. Do not forget to also take into account costs that do not recur every month, such as the bill for sewerage or an insurance premium that you pay once every six months. You only know what you have left over once you have listed your income and expenses. Do not spend more than that and also try to set aside a monthly amount to set up a game for unforeseen costs. You can also do this if you have limited financial room: even if you only save 5 euros a month, it is always better than nothing. You must also ensure that you always continue to pay your fixed costs. Once you accrue a debt with, for example, the housing association or health insurance, it is often difficult to repay this debt.
Prevent debts by not buying on installment
For example, with mail order credit, it is becoming increasingly easy for customers to buy things that they cannot afford at the moment. And with special offers like “now 0% interest!” But beware: do you actually have the space to pay a monthly installment? Because if you had had this space, you could also have put this money aside, so that you could have immediately paid for the purchase in question. So always be careful when buying on installment, it is less attractive than you think.
Other tips to prevent debts:
- Don’t be red on your checking account;
- Make sure you are properly insured;
- Try to pay high bills in installments.