Finance is a huge part of our lives yet it remains something that many people struggle with. Today, more than ever before, people are getting into financial difficulties and debt.

The recession has been going on for a few years now and people’s houses are still being repossessed. People are still losing their jobs. Worst of all, they’re losing their freedom and independence.

What’s saddest about people getting into debt is the ties it causes. It you’re in debt you’re often forced to stay in a job or an area you don’t like in order to repay the debt. There’s an incredible freedom that comes from being free of debt. Only when you’re debt free can you actually live the life you want and be the master of your own destiny.

So here are my tips on how you can avoid getting into debt, simplified and repackaged in a way that I hope makes you see the true value of living within your means.

Never borrow money to buy unnecessary toys
Living within your means brings happiness and freedom that expensive new gadgets don’t. If you can’t afford to buy the car or TV of your dreams then don’t buy it. Get what you can pay for in cash now and be happy with it. If you really need to buy a car to get from A to B then buy one you can easily afford.

Don’t be tricked into finance plans that offer “18 months interest free”. If you can’t afford to buy the item for cash now you may not be able to in 18 months either. If you buy something on those crazy “free credit” terms, you’ll be paying over the odds for it and you won’t be free anymore. You’ll be tied down to making those repayments until they’re paid off. Much better to save up, pay cash and live free.

Maybe you’re worried about what people will think about your unfashionable car or clunky TV? Don’t be. Anyone who judges you by that isn’t worth worrying about anyway.

Non-Essentials
Little things like clothes, skincare, & toiletries add up. Just get what you need. I’m sure that many of us in developed countries have many more clothes than we can actually wear. That’s why I’ve classified clothes as non-essentials here. How many pairs of jeans and t-shirts does one person actually need? I’d be prepared to bet that it’s not as many as you’ve already got, especially if you’re female. Sorry girls!

I’ve just spent a year without buying any new clothes, apart from some new sports socks when my old ones had gone to holes and a pair of shoes for a wedding. It wasn’t as if I was going to be naked. I had more than enough clothes to see me through the year and I think I even managed to look quite nice most of the time too.

It was great not to bother going to shops and shopping centers and also good at the end of the year to evaluate what I actually needed clothes-wise and spend a few hours clothes shopping. If you can’t cut down your clothes shopping to once a year try shopping for clothes only twice a year, maybe when the sales are on.

Or have a clothes and accessories swap party. Invite about 10 friends of varying sizes and tell them to bring the clothes and accessories they never wear. You’ll be laughing over each others’ disaster buys and amazed to see how good your unflattering trousers look on someone else. This is a cheap, fun night in and a great way to bond with friends.

When it comes to skincare and toiletries get cheaper brands. The pricier ones aren’t worth it, you’re just paying for the expensive advertising campaigns and the supermodels who promote them. Now why would you want to do that?

So you really need something?

Do you really need it? Really? Truly? It’s amazing how many things I think I need and write on my list but never get round to buying because I don’t go to the shops very often. If you go shopping every week, apart from to the grocery store or food market, then you’re probably spending more than you need to just by being in the shopping mall. Avoid shopping malls like the plague, especially if you have kids with you.

But let’s say you’ve convinced me there’s something you really need, your bike’s broken beyond repair and you really need a new one to get to work. Please, never buy anything, new or used, without taking the time to ask these two questions:
What’s the best price you can do for me? Can you do a better deal for cash? You’ll probably get one discount this way but you might even get two price cuts.

If you can wait until the annual sales, you might get a better deal. Or put a search on Ebay, go to garage sales and tell your friends and colleagues you’re in the market for a new bike to see if anything comes up.

Housing
Sometimes renting can be cheaper than buying, especially if house prices aren’t increasing. Don’t be pressurized into buying a house or buying a more expensive house than you can easily afford the mortgage repayments on. You’re not buying a better house, you’re buying worry and financial pressure.

Grocery Shopping
Forget silly food coupons, just make sure you bulk buy and buy the supermarkets own brands. With most items (basmati rice, virgin olive oil, canned tomatoes, pasta, etc.) some of the cheaper brands taste just as good as the more expensive brands to me. There are only a few things I’m fussy about – I have to have the more expensive brand of mayonnaise – but for most things you’ll probably find the no name brands are just as good. Pick and choose your products carefully.

Be Patient
For example, go to the movies on cheap Tuesdays or wait for the DVD to come out to the $1 RedBox. Most things have promotions at certain times of the year or on certain days, you’ve just got to wait for them.

Banish takeouts
I love eating out. I don’t do it as often as I’d like but it’s a real treat for me to go to a cafe or restaurant and eat a meal someone else has cooked and will clear away for me too. I just don’t get the idea of takeouts though. Most of them don’t taste as good as the food you’d make at home and it’s not that hard to wash up a chopping board and a couple of saucepans. Most healthy food is quick to make at home too (things like stir-fry and omelets) or can be prepared in bulk so you can freeze some to reheat on another day (curries and soups.)

I know often you may want to socialize without feeling you need to kill yourself with cooking and shopping. Try having a curry night and asking everyone to bring along one dish. Or just a potluck and see what happens. Or a fun sushi night where everyone knuckles down and learns how to make their own sushi.
Start making these life changes to stay out of debt and save money today. There’s no time like the present. Like any addict you’ll suffer a bit at first, but when you get used to spending less you’ll be glad you did. Leave your credit cards at home and reassess how to cut down your spending and what you’ll do when you’ve controlled your spending and earned your own freedom.

What will you do when you’re out of debt and in control of your finances? Keep your eyes on the prize and you’ll get there in the end.

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