Save and Conquer

The following is a guest post by Sarah Scrafford.

If you’ve never been in debt, thank your lucky stars and pray you never ever have to go down that road as long as you live. Debt is the quicksand that pulls you under slowly but steadily. I call it quicksand because it’s equivalent to a slow death – it’s painless until you’re in above your head, by which point it’s almost too late for survival.

One redeeming aspect of quicksand is that you have time to get out the moment you realize you’re sinking; it’s easy enough if you have the resources and strength to pull yourself to safety. And once you get out, if you’re sensible, you’ll never stray anywhere near the vicinity of the quicksand I call debt.

As the old saying goes, Prevention is better than Cure; by drawing parallels in financial terms, you can ensure that your life is free of debt and the Pandora’s Box of ills that it carries on its shoulders.

• There’s no such thing as a free lunch – Do not spend what you do not have – in other words, don’t use credit cards unless they’re absolutely necessary. Keep only one or two cards around to pay for emergencies and make sure you pay more than the minimum balance on these cards promptly each month. Remember that when you use credit cards, you’re spending money borrowed from your credit card company, and every penny you do not pay back when your bill comes, is a penny that’s accruing interest – money that will make a dent in your bank account and fill the coffers of your credit card company. If you’re the forgetful kind, set up things with your bank so that payment is automatically made every month from your account to your credit card providers. Late payments can work against your credit score and add to the amount on which you owe interest.
• A bird in the hand is worth two in the bush - When your paycheck comes in at the end of each month, put aside a small percentage in a savings account. Ensure that you do not dip into this account every time the urge to spend hits you out of the blue. Better still, set this up as a joint account that needs the approval of both account holders to withdraw money. This will avoid impulse withdrawals. This is your nest egg for emergencies, as opposed to knocking on loan sharks’ doors and struggling to pay back their exorbitant rates.
• Neither a borrower nor a lender be – It’s a bad idea to lend people money and an even worse one to ask for loans. Instead, learn to live within your means – it’s easy if you set up a budget and stick to it. Cut back on eating out, making unnecessary phone calls and buying things that you absolutely do not need.
• The grass on the other side of the fence is not always greener – Don’t try to ape other people and live life the way they do. When you chase a lifestyle that’s far outside your means, you end up broken and alone, with only debt for company.

By-line:

Sarah Scrafford is an industry critic, as well as a regular contributor on the subject of Small business. She invites your questions, comments and freelancing job inquiries at her email address: sarah.scrafford25@gmail.com.

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