5 Ways To Avoid Debt While You're Young

American Investment Planners LLC

500 North Broadway, Suite 260, Jericho, NY 11753

(516) 932-5130 / (866) 932-5130

Until you become financially independent, it can be easy to spend or ask for money without thinking - if you don't have any bills to pay, your money is yours to do what you please, right? Maybe so, but unless you start adopting good financial habits early, getting used to this mindset can easily send you in the wrong direction, the direction that leads you to debt.

If you recently started college, graduated college, started a first job or moved into your own home or apartment, now's the time to really buckle down and make sure your finances won't wind up in the negative zone - here are a five ways to start doing so:

1. Avoid credit cards until you're really ready. Credit cards are important in the sense that they can help you build your credit and provide a safety net for emergencies, but they also make it tempting for you to go out and spend money that you don't have. Unless you feel like you can avoid this type of temptation, hold off on getting your first credit card until you feel like you are truly financially responsible.
2. Keep track of your spending. Knowing how much money is coming in and out is one of the easiest ways to keep yourself from going into debt - this is where creating a budget comes in. If you don't know how much money you owe in expenses each month (we're talking student loans, car payments, rent, etc), it can be very easy to spend too much recreationally and leave yourself with less than is needed to cover your bills. Bonus tip: when creating your budget, it doesn't hurt to overestimate your expenses and underestimate your income; in fact, it can really help.
3. Make yourself a schedule. If all of your monthly expenses aren't due on the same date, create a schedule that outlines exactly when all payments must be made. By being organized, you can prevent yourself from missing payments - remember that missing just one payment is all you need for things to spiral out of control.
4. Have an emergency savings fund. As soon as you can start putting some money aside for emergencies, do it. Even if it's as little as $5.00 a week or $25.00 per paycheck, having cash set aside for real emergencies can help you stay on track when you need to the most.
5. Talk to a professional. Financial planners are not just for those who have a ton of money to protect. If you want to really do everything that you can to avoid debt while you're young, you'll want to meet with a financial planner so that you can develop a strategy for how you'll pay down outstanding debts and save for the future responsibly.

If you don't already have a financial planner, contact the team here at American Investment Planners LLC! We pride ourselves on our ability to create strategies for any and all short and long term financial goals, and would love to be able to help you next.

To set up an appointment or to learn more, please call (516) 932-5130 or email info@americaninvestmentplanners.com today.