So you have finally paid off that student loan and you are now debt-free. So what next? Credit cards can become the bane of your post-debt existence but are also handy for the day-to-day consumer. Your first step to minimising the risk of getting back into debt is to avoid overdue bills from your creditor. If you can get rid of that credit card altogether, even better, but we understand it’s not always as simple as that. The most important way to avoid debt, is to commit to better spending habits. Not only will this improve your financial situation, but it will also help you feel empowered when you see your improvements. The harder you work on improving your habits, the easier it will get over time to begin making better financial decisions.
Here are some clever ways you can avoid credit card debt:

• Build an emergency fund that you can turn to when you need funds instead of borrowing from your credit card.
• Pay with cash instead of your credit card, whenever possible.
• When shopping, take only the cash you can afford to spend.
• Don’t use your credit card to buy things you can’t afford. If you don’t have the cash to buy it, then start saving for it.
• Live within your means. Instead of spending up large to fund the lifestyle you want, be content with the lifestyle you can actually afford!
• Keep saving and build different savings for different situations. For example have a savings that you dip into for going out to dinner, and then have a separate savings for overseas trips and car emergencies.
• Budget your money! Budgeting your money well will help you stay in control of your spending, and on track with bill payments.
• Pay your credit card balance in full each month, this will help you stay on top of things.
• Don’t miss credit card payments! Prioritise these so you don’t get hit with extra fees.
• Avoid impulse buys by thinking before you buy. Do you really need it, or do you just want it?
• Do your research before making big purchases. Make sure you’re getting the best price and don’t be fooled by buy now pay later schemes, they will just prolong your debt.
• Keep a record of your credit card purchases, this way you have an idea of what you will need to pay but can also make sure you’re being charged correctly.
• Always pay more than the minimum repayment on credit card bills when you can.
• Consider transferring your balance to a lower interest rate. Make sure balance transfers still get the lower rate though!

Staying out of debt isn’t easy but will benefit your life not only now, but later on when you’ve been able to save instead of repaying creditors for the rest of your life. And if you’re ever struggling to be content with living within your means remember this great quote by Will Smith; “Too many people spend money they haven’t earned, to buy things they don’t want, to impress people they don’t like.”