How to Implement Debt Prevention
The debt crisis is growing, and with it, the need for actionable debt solutions. Consumer debt in the USA alone is now above $14 trillion, and with the added turbulence of the COVID-19 pandemic causing unemployment, evictions and health crises, this is bound to get worse. The debt crisis worldwide is a bleak view indeed, but if you look closely, you will find there are viable ways to prevent debt from piling up. Debt is not always avoidable, but with this helpful guide to preventing and managing debt, you will be on your way to debt freedom.
Identify Potential Sources of Debt
If you are just starting your journey into adult life, there are major debt-inducing factors which can cause a personal financial crisis. Although debt is not always avoidable, if you wish to go through life with more control over your finances, it is worth identifying potential sources of debt in your future plans. So what are the major sources of debt for the average adult?
- University or College Education. Having a degree is highly worthwhile and many people aspire to attend a prestigious college. While this is a great way to enhance your career prospects, meet new people and get a taste of adult life, university can plunge you into lifelong debt. The average cost of university in the US is $20,00 per year. Total that with four years of education and maintenance costs, you are staring in the face of up to $100,000 in student loans. If you are concerned about student debt weighing you down, try to explore other options, such as an apprenticeship or internship which can help you build your career without a degree.
- Buying a home. Of course, this is something most people aspire to, and rightly so. Being on the property ladder is actually beneficial for your finances, as your property will be considered an asset which boosts your credit score, and of course provides peace of mind. However, buying a home using a disreputable mortgage lender, or buying beyond your budget, can put you in dangerous debt further down the line. Be prepared to take on your mortgage and ensure this is a commitment you can actually make.
Avoiding potential sources of huge debt is one of the easiest debt prevention tactics. This is not to say you should never go to university or buy a house - quite the contrary - but simply that the subsequent debt is considered and planned for.
Living Within Your Means
This is a simple piece of advice, but it seems fewer and fewer people are following it nowadays. With the rise of social media ‘influencers’ and celebrity culture, more and more people are feeling the pressure to have the latest fashionable items. Many are more concerned with coming across as wealthy than actually building their wealth. This can be highly problematic, even for high earning individuals who have no need to be in debt. The addictive cycle of the must-have attitude when it comes to clothes, shoes, cars, and accessories can be dangerous for young people who want to have it all, and be like their favorite rapper or influencer on Instagram.
What does it mean to live within your means? It means that you do not exceed your income with your outgoings. Applying a strict budget to your spending and allocating specific budgets to different things - for example, a certain amount for food, another for utilities, and another for fun activities - is time consuming. There’s no doubt about that. However, despite the big effort it takes to be strict with yourself and save some of your earnings for a rainy day, this is the number one way to prevent yourself from going into debt. If you can’t afford it right now, don’t buy it. It is as simple as that.
Of course, this advice is not as useful if you are living below the poverty line, in extreme circumstances. According to a Forbes study in 2019, 78% of American workers live paycheck to paycheck, which means they can not save money for emergencies or future investments. This is a devastating statistic which leads to many Americans living constantly in a cycle of debt, with no way of breaking the cycle. Debt relief solutions are necessary, because sometimes, even the best prevention tactics cannot stop the inevitability of debt for many Americans.
Debt Relief Strategies
If you have found yourself in debt, try not to blame yourself. Whatever has led you to this point, there is no going back now - so there is no point in pointing fingers or feeling guilty about the sequence of events. What you need now is a strategy - a strategy to get out of this worrying mess.
A debt relief strategy can take many forms and the one that’s best for you entirely depends on your situation, both financial and personal. If you are earning steadily and can form a repayment plan, this is highly advisable. If you can afford to, hire a financial advisor who can assist with making the first steps towards debt freedom.
Alternatively, you can consider debt relief programs such as those offered by DTSS - the Debt To Success System. Is DTSS legitimate? Of course. This fully qualified program helps those who are in insurmountable debt reach debt freedom by offering courses and professional advice to individuals. The team of member care specialists will attend to your specific situation with care, understanding and professionalism.
No matter what kind of solution you are searching for, you can find it with the debt relief solution that works for you, your lifestyle, your income and your family’s needs. Do not hesitate to take the first steps today towards debt prevention or debt relief.