How to Never Get Into Debt in the First Place

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Debt is a lot like smoking: it’s better to never start.  Both foster bad, unhealthy habits that are incredibly hard to break even when you know what you’re doing is wrong.  So here’s some tips to help you never form those nasty habits; to never get into debt.

Don’t Get a Credit Card

If you don’t have one, you can never get into trouble with ugly consumer debt.  Credit cards are considered the quickest and easiest way to build credit, but they are also dangerous if you’re an impulse shopper.  Be honest with yourself.  If you’re not able or responsible enough to pay off your balance before it starts incurring interest, don’t have plastic in your wallet.  “Then how do I build credit?” you ask.  Consider taking out joint loans on things like car purchases until your scores are high enough to get bank loans on your own.

Use Credit Cards Responsibly

If you must get a credit card, think of it as more of a store rewards card.  Use it to get benefits such as air miles or cash back at stores that your card provider specifies.  Pay off the balance within 48 hours.  If you don’t have enough money in your bank account to pay off the balance, don’t buy it!  “Buy now, pay later,” actually means, “Temporary happiness now, financial struggles and stress later.”  Completely dodge cards with annual fees.

Have a Savings Account
Life happens.  And it usually happens at the most inconvenient times.  Having money in your savings account will allow you to not have to change things when you get laid off, your car breaks down, or a family member catches an illness or gets an injury that is not covered by your health insurance.  A general rule of thumb is to have enough saved to cover at least three months of your normal bills and living expenses.


Consumer debt is not the only imprisoning issue.  Student debt can damage your lifestyle, as well.  Before you take out tens of thousands of dollars in loans, consider what your expected salary will be for your chosen field.  If you’re going to be an elementary school teacher making $32,000 a year, taking $40,000 in loans is probably not a good idea.  Do everything you can to steer clear of private student loans.  Their terms are usually less reasonable and even less forgiving.  Other ways to pay for school include government grants and scholarships sponsored by your school or other organizations.
If you cannot afford school, it’s probably best not to go until you have a solid financial plan.  The registrar’s office will not report any payments you make on time, but you can count on them reporting any missed or outstanding payments to crediting bureaus.

*These tips are admittedly hypocritical.  While I dodged debt for a long time, it eventually got me.  I don’t have a MOUNTAIN of it, but I’m currently working on breaking the nasty habit and living completely debt free.*

This post is a part of Women’s Money Week 2012. For more posts about Debt, see

11 thoughts on “How to Never Get Into Debt in the First Place

  1. Daisy @ Add Vodka

    So true – it’s easier to just not get into it. It’s important to be conscious of what you’re getting into with debt. I don’t think that all of anyones college tuition needs to go on a loan – with a job and some smart money moves, students can pay for at least half of their education up front.

  2. femmefrugality

    I’m so with you on that one. I’m working on getting through school right now…with 0 debt. Grants and scholarships, grants and scholarships. A job is not a bad idea, either. I’ve got a full-time one as a mommy right now, and thank goodness I have someone who is willing to help me have that be my job alone.

  3. jlcollinsnh

    good thinking here, FF.

    this whole, and actually very new, concept that it is important to “build credit” is hogwash.

    credit is disturbingly easy to get. creditors are drooling over the prospect of lending you money.

    Avoid debt. period. I’ve only ever borrowed to buy real estate and even that wasn’t such a good idea. lenders couldn’t wait to hand me the money.

    1. femmefrugality

      Agreed. It is so new. And not so long ago carrying debt was a shameful thing to do. It still is, but not to such a stigmatizing degree, and no one had it on such a large, pandemic-like scale.

  4. Katie

    I agree about not getting a credit card and also making a financial plan before going to college. I’m actually glad that I didn’t go to college right after high school and get all that student loan debt. I’ve been taking classes that my grants are paying for. I am so glad I avoided the loans.

  5. Shelly Jones

    Good simple tips everyone should follow! Having been on both ends, it’s so nice to have money saved to cushion if needed.


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