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10 Ways To Avoid Getting Into Debt In Your 20’s

10 Ways To Avoid Getting Into Debt In Your 20’s

Your late teens and early 20’s are times in your life when many people are making transitions from dependency to independence. With that, comes financial independence. Maybe you’re in college, or have just moved out of the house you grew up in.

Regardless, learning to balance rent, bills, groceries and other expenses can come as quite a shock, and many young adults end up accruing large debts that can plague them for years on end.

Many young adults are targeted by usurious credit lenders, offering high interest credit facilities such as credit cards, department store-specific cards and loans. These are often sold to young adults as a safety net for emergencies, but the reality is that frequently, these credit facilities are maxed out very quickly, saddling the borrower with high-interest debts that can take years to pay off.

Here are some simple, no nonsense pieces of advice for any young adult who wants to live a debt-free, stress-free life during their best years.

1. Avoid credit cards

If we could give one piece of financial advice to anybody in their 20’s, it would be this. You may think that it’s a good idea to have a credit card for emergencies, or to use one to improve your credit rating, and although these are all well and good, the reality is that credit cards are rarely used for these purposes, and the temptation to spend on them is always there.

Credit card companies aim to get people into debt while they’re young, and keep them their by bleeding them very slowly (through minimum payments and compound interest). Credit lenders are masters of making money, and they will play on your fear of being broke to mislead you into getting a credit card.

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The only real way to beat the credit card companies is not to get a credit card.

2. Overestimate your outgoings, underestimate your income

It always makes sense to have a budget for rent, bills, food and other expenses, but one thing that people seem to neglect to factor into their budget is that income and outgoings can fluctuate wildly. For this reason, it’s always a good idea to draw up a budget using your maximum estimated outgoings, and your minimum estimated income.

Remember that if you are sick one month, your income will decrease, and during the winter, your heating bills will increase. Using this method should help to ensure that there are no nasty surprises at the end of the month when the figures don’t match up.

3. Be prepared for sudden expenses

Never make the mistake of assuming that things won’t go wrong. Things will break, prices will rise and fines will be charged. When drawing up a budget, I find it’s wise to set aside 15% of your income just as a buffer against sudden expenses.

Your car might breakdown, your boiler might go on the fritz, your dog might get sick. Be prepared for this.

4. Accept that you may not be able to afford luxuries all the time

Luxury items bring fleeting and temporary happiness, which dissipate as quickly as they come. Expensive clothes, technology and furniture actually do very little (if anything) to improve your life and general satisfaction levels.

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That’s why it’s better to invest in doing things rather than having things. You don’t have to live a bare-essentials lifestyle, but cutting back on unnecessary luxuries during your younger years will not only save you a mountain of debt that you’ll have to pay off, but will also allow you to live a simpler, more care-free existence.

In the words of Roger J Corless, “Happiness is not something I have, it is something I myself want to be. Trying to be happy by accumulating possessions is like trying to satisfy hunger by taping sandwiches all over my body.”

5. Give yourself an allowance and stick to it

Sticking to a budget is often easier said than done. We often find the easiest way to regulate spending is to have an account which your wages are paid into, and a separate account for spending, and then arrange for a set amount to be paid into the spending account (either monthly, weekly or even daily), to ensure that you can keep track of your finances without overspending.

6. Save for things you really want

One of the side effects of the western fast-food culture of instant gratification, is that we struggle to get our heads around the concept of waiting to get what we want. In fact, we have all sort of credit schemes set up to actively encourage us not to wait.

Almost anything these days can be bought on credit. This usually involves making small, monthly payments for years on end at a massively inflated interest rate. It all seems very manageable, but one small payment added to another small payment, and another and another all begins to add up.

Before long, your disposable income has shrunk down to such a small amount that you can barely afford to buy gas for that over-sized car you’re still paying off. And what happens if you lose your job and can’t afford to make the repayments? Well, then you have to hand it all back.

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7. Learn to enjoy the little things

Some of the best things in life cost little to nothing. You can’t put a price on good company, laughter or fun. Anyone who claims that you can’t have fun without spending money probably isn’t much fun to begin with. Some of the best activities in your life life can absolutely be cheap or free. Trade TV and computer games for socializing, and you’ll find life becomes richer (and you, too!).

8. Use savings to pay off debts

This is one of the most obvious but commonly overlooked ways to reduce your debt level. If you have $1,000 of debt, accruing interest at 18% APR (if you were so lucky as to have it so low), and $1,000 in savings, accruing interest at 3% APR (if you were so lucky as to have it so high), then you would immediately save yourself money by paying off your debts with your savings.

There is pretty much no scenario in which you will be borrowing money at a lower rate than the interest on a savings account.

9. Pay debts on time

If you have debts to pay, make sure you have the correct direct debits/standing orders and available money to pay them on time. Often the charges for missing payments can cause your initial debt to soar, which can lead to spiraling debts and financial chaos. Always ensure you know when money is due to be paid, and ensure that you have the funds set aside to do so.

10. Interest-free credit is not free money

Just because something says it is interest free for six months, don’t assume that this means you have just been given a fistful of free cash. These offers are setup to deliberately encourage reckless spending, and as soon as the interest-free period is over, you’re saddled with a high interest rate on an insurmountable heap of debt, which you probably don’t have much to show for.

Now, we know what you’re thinking; you could just put all of the money in a savings account, wait until the six months is up, and then pay it all off, keeping all of the interest accrued for yourself.

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Great idea… In theory. The reality is that less than 1% of people who attempt this actually manage it. Your creditors know this. They are not stupid, they know how to get you into debt and keep you there for as long as possible. Don’t be caught out.

Hopefully, this has given you some insight into how to avoid debt. Debt is a totally unnecessary stress that the majority of us deal with throughout our lives. Your younger years should be spent enjoying the simpler things in life, not over-complicating it with financial worries.

With a little calculation, and a lot of impulse control, you can have a fun, free and fulfilling life. Without Debt.

Featured photo credit: Flickr via farm8.staticflickr.com

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JC Axe

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Published on January 17, 2020

How to Eat Healthy on a Budget (The Definitive Guide)

How to Eat Healthy on a Budget (The Definitive Guide)

Have you ever looked at health gurus and wondered how on earth they can afford all that health food? Or maybe you’ve tried multiple times to start eating healthy only to find the $600 monthly budget overwhelming?

If you’re anything like me, you know exactly what I’m talking about! I absolutely understand the sinking feeling of looking back over a grocery budget and finding you went way over what you intended. And besides that, it can be hard to justify buying a tiny $5 bag of carrot chips while a $1 mound of potato chips is sitting right next door.

My husband and I recently ran into that struggle. We got married this past year and soon found ourselves trying to balance 12 hour work-days with keeping our relationship strong and trying to keep our personal businesses afloat. Granted, our budget was the one thing that took a hit! After we started tracking our spending, we were shocked to see we were spending over $1000 a month just on food! A little planning cleared that right up.

So, how to eat healthy on a budget?

Here’re the top tips I learned that helped us shave over $600 monthly off of our food budget so we could reinvest that in the areas that really mattered to us![1]

1. Meal Plan

You’ve probably heard the saying “Fail to Plan, Plan to Fail” right? Well, this saying couldn’t be any more true than in the area of healthy budgeting! The fact is, most healthy foods don’t actually cost that much… the pre-made time saving ones do!

If you go about creating a healthy meal plan within your budget, you could easily cut costs down to around the same price you are paying for junk food.

Meal planning is as simple as working in foods you already have in your fridge/freezer, adding in several meals with simple ingredients and seasonal veggies, and breaking it down into a shopping list.

Often, finding a few meals to make in big batches will save you the most money in the long run, which leads me to my next point.

2. Cook in Bulk

Not only will cooking in bulk save you a whole lot of time, it will save you a whole lot of money too! Believe it or not, if you find meals to make with similar ingredients, you can easily save more money than when you were eating unhealthy.

Don’t believe me? Just look at a $4 frozen pasta dinner. Now, sub that with a veggie pasta dinner. 5 zuchinni ($3), Pasta sauce ($2.50), and chicken ($5) could last you a full 5 meals which adds up to a whopping total of just over $1 per meal!

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That’s not even digging in to all the money you will save from fast-food. Trust me, a little $10 spent here and there add up! You’ll be saving a whopping amount from all the meal prep you will do!

3. Cook all Your Meals in One Day

The science behind this is 2-fold.

Number one, if you have lots of meals to grab and go, you will be far less likely to binge on pricier food when you get hungry. Let’s be real, you’re not going to spend 1 hour cooking when hub-n’-grub is at your bekon-call!

Number 2, meal prepping ahead of time will help you stick to your meal plan better when you’re not in the mood. Let’s face it, we’re all going to have days when protein and veggies doesn’t exactly sound appealing. But, if you have a full meal that’s quick to grab in the fridge, it will be easier for you to fill up on the good stuff rather than spending money on what you don’t really need.

4. Cut Back on Snacks and Specialty Items

I can almost hear you from across the screen. “But, I thought snacks were good for me!” Here’s the deal: Snacks are expensive! And healthy snacks, oh my goodness, say goodbye to your paycheck!

Look, I’m definitely not saying that healthy snacks are bad. Quite frankly, I would much rather you chow down on Halo Top than a triple-butterfinger-fudge sundae. It’s just that… healthy snacks are why eating healthy gets a bad rap for being expensive.

Look at it this way: You could either buy a week’s worth of groceries full of chicken, fish, beans, veggies, and fruits for $30. Or, you can spend that $30 on six snacks that will leave you hungry for more.

What’s more, the ingredients for gluten-free baked goods, sugar free substitutes, or protein powders alone will add up to you eating a full week’s budget in one sitting. By all means, if you want to work some yummy items into your budget, do it! But don’t confuse that extra monthly $300 of delicacies as a necessity. Your body and budget will thank you!

5. Satisfy Yourself with Your Favorite Subs

We all have an emotional tie to food. Maybe pasta reminds you of home! Or maybe a fresh-baked pizza is what gives you a feeling of comfort. Whatever you favorite food, find a way to work it into your budget in the best way.

We’re only human, and depriving ourselves of what we love will never end well. More often than not actually, it ends in take-out or a pricey-premade substitute.

Instead of finding yourself in this situation, find a way to make your favorite foods fit your budget. Zuchinni noodle pasta might just give you that feeling of home without breaking the bank. Or maybe you could google a healthy pizza alternative you would like that you could make at home. Often, something similar to your craving will be enough to give you a sense of satisfaction.

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Or, just buy your cheat meal and save it for a special day. That’s okay too!

6. Stick to the Cheaper Proteins

Okay, I know we all love steak. Unfortunately, buying pre-cooked or expensive cuts of meat are one of the easiest ways to drain a budget.

Instead of purchasing those, try buying frozen chicken or eggs. A 5 lb bag of frozen chicken can be as cheap as $5, and you can buy a whole weeks worth of eggs for just over $1. You could even try going vegetarian for a few meals if you really want to cut down on costs!

7. Buy Frozen Fruits and Veggies

I know, we all love our fresh fruits and veggies! However, sometimes frozen might be the way to go if you’re looking to cut costs!

Fruits and veggies are easiest to ship when frozen, making them a much cheaper option. Contrary to popular belief, scientists have actually found that frozen might be better for you too![2]

The reason is, frozen produce is picked at its prime and shipped immediately. Fresh fruit tends to be picked much earlier so it will ripen while being shipped. Not only does this make it less nutrient dense, but sometimes the fruits are actually pumped with artificial flavors to make up for the lack of real nutrients.

While I’m all for fresh fruits and veggies, don’t feel guilty if you opt for frozen foods due to a budget.

8. Bump up the Calories with Rice and Beans

The problem some people find when trying to eat healthy is that it can be hard to get the amount of calories you need without relying on expensive “specialty” items. Instead of stocking up on pricey gluten-free breads and pasta, I say stick to simple rice and beans as the bulk of your meals.

Brown Rice is very cheap and easy to use as a base for bowls and dishes. Likewise, beans can add a bit of fiber making you feel full and satisfied without having to spend a lot of money.

If you are trying to cut on body fat, use extra veggies as the bulk of your meal and add in rice and beans as a filler.

9. Try Acai Bowls

Acai Bowls can be a really cheap and satisfying meal as long as you do it right.

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You can find cheap fruits at most stores or just freeze your fresh fruits before it goes bad.

Making your own granola can save you a lot of money as well. The total cost for this delicious meal should only add up to a few dollars compared to triple that price if you were to buy one pre-made.

10. Make Your Own Meal Kits

Do you like your meals freshly cooked? Sending meal kits to your doorstep is an easy way to drain your budget. Instead, try making your meal kit at home! Not only is it fun, you will easily get a delicious taste.

Simply find a few simple meal cards or print some out and fill a ziplock with the ingredients for each specific day. Don’t know what recipe to make? Another option is to order one month of meal kits and recycle the recipe into ingredients for the upcoming months with ingredients you picked up from the store.

11. Don’t Drink Your Calories

A few dollars spent here and there can really add up! Just as with specialty items, healthy drinks can be a blackhole for you. An energy drink and kombucha and coffee each day could easily have you spending and extra $300 each month!

I you really need a special drink fix, try making your favorites at home. Bring a coffee in, make kombucha, or even try making lemonade with stevia or a healthy soda. You’ll be surprised w hat a big difference such a small change can make on your budget!

12. Buy Cheap Online

Just like anything else, it pays to be prepared. Buying foods from online retailers can be a really affordable way to save money as long as you’re prepared.

Plan ahead for those more expensive specialty items you can’t live without. It will save you tons of money compared to having to buy food from a specialty store.

13. Don’t Fret about the Clean Fifteen

One of the huge things that can mess with a person’s budget is eating organic. For the record, I am 110% all for eating organic whenever you can. However, for some people, it can be hard to make organic food fit into a budget.

Instead of scratching healthy eating for a smaller budget, try to buy meat and the dirty dozen organic, and don’t go crazy about the rest. The clean fifteen are the fifteen safest foods to buy that aren’t organic! Meanwhile, the dirty dozen is the most worthwhile avoiding. According to Produce Retailer, these are the dirty dozens:[3]

  1. Strawberries
  2. Spinach
  3. Kale
  4. Nectarines
  5. Apples
  6. Grapes
  7. Peaches
  8. Cherries
  9. Pears
  10. Tomatoes
  11. Celery
  12. Potatoes

14. Pay Attention to Storage

Keeping the food you have is just as important as how much food is in the first place. Try to stay on top of how much produce you can actually use before it goes bad. It might not be a bad idea to pencil an extra shopping trip in the middle of the week to keep food fresh.

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Investing in good food storage containers could go a long way in saving you in the long run as well.

15. Freeze Food Before it Goes Bad

Instead of getting mad at yourself at the end of the week for all the wilted produce you need to throw out, try freezing it before you get to that point.

Most frozen veggies will taste delicious in stir fries and soups. You can freeze fruits to make sorbet or smoothies. Frozen greens can be chopped up and tossed into just about anything for a nutrient boost!

16. Consider Ditching Most Supplements and Powders

I have nothing against superfood powders and supplements. However, if your budget is tight, it can be hard to fit supplements and powders in.

Instead of adding in powders, add extra nutrients to you food. Add lots of greens and veggies to all your meals to meet your nutrient needs. If you need a specific supplement, you can find great deals online as well!

17. Use Budget App

There are so many great apps you can download for free. One of my current favorite is HoneyDue because you can track your budget easily with your spouse. There are many options available, just find the one that you’re most likely to use. The ones that download your spendings automatically are often the easiest and will give you a more accurate number.

My husband and I use the same app, but have a separate budget for each of our weekly food plan and for our additional snacks. Keeping things separate can often be helpful to know exactly where your money is going. Plus, it can help hold you accountable if you have a significant other you are sharing money with.

18. Use What you Have

Most people have unused protein powders lying around in their cabinets. Instead of letting that go to waste, work them into your meal plan. Protein powders can make amazing doughnuts, pastries, or pancakes!

19. Enjoy the Process!

Finding ways to enjoy your new lifestyle will be helpful in sticking to it long term. Find fun in seeing how much you can save each month. Make a competition with someone to see who can stick to the lowest budget and create something fun to do for the winner with some of the money saved! Blast some music in the kitchen while cooking your new recipes.

Budgeting and health doesn’t have to be a drag. Make it fun and you’ll enjoy your new lifestyle long-term!

Featured photo credit: kevin laminto via unsplash.com

Reference

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