4 Tips For Living Debt-Free And Avoiding Bankruptcy

Consumers all across the country are always looking for ways to save money, pay off debt or avoid debt completely. This is particularly true when you consider that recent reports show that 35 percent of Americans have debt that is at least 180 days delinquent and is now in collections. Whether or not debt has ever been a part of your life, here are four ways that you can move forward with your live and live it without incurring debt:

1. Build a Sizable Savings

It may seem like a nearly impossible task, but it is important to save money if you want to live a debt-free lifestyle. By saving money, you won't even give it a second thought when an unexpected expense for a car repair or medical bill comes up. Plus, saving is essential for many long-term costs that may arise, such as a new home, medical conditions, or a child's college education. Your savings can even be used for an spur-of-the-moment trip every now and then to reward yourself for saving. However, without a significant amount in your savings account, unexpected costs that crop up will sneak up on you and put you at risk of leading a financially unhealthy life.

2. Pay Off Credit Cards Instantly.

You may have credit cards to keep up your credit score. However, you don't have to max out your credit cards and only pay the minimum payment each month. Instead, pay your cards off in full each month for all transactions charged from the previous cycle. By doing this, you will improve your credit score and leave yourself access to available money should you need it for an emergency. Plus, many hotels and car rental companies won't allow you to make reservation without a valid credit card with funds available.

3. Buy a Used Car.

Instead of buying a brand new, luxury car with a monthly payment and high insurance, consider purchasing a dependable used car. With a little bit of research and a good mechanic to give it a once-over, you should be able to find a reliable car that will likely last years with minimal maintenance. 

4. Rent First

It may sound like a good idea to jump in head first and go ahead and make a large purchase on a home. However, real estate properties are not cheap. In many cases, you may be better of renting somewhere to live first, while saving up the money to purchase a fixer-upper or a modest home. The home may not be your dream home when you buy it, but it can be eventually with upgrades, renovations and additions. If you pay for the home outright, you'll have more money each month to spend on those things to make the home more your style.

If you find that after trying these things that you are still unable to live debt-free, you may want to consider consulting with a bankruptcy attorney, like Arthur M Richard. This is particularly true if you feel that you are in over your head. Even if you don't want to lose everything, there are still ways that you can get the financial help that you need.