Golden rules to avoid debt

Oct 20, 2010

Don't borrow to your limits -

Lenders can be overzealous. Give yourself a bit of a buffer to cater for interest rate rises & unexpected costs

Prepare and follow your budget -

Well done if you set a family budget but you need to enforce it as well. Don’t get slack and relent to the pleas of your kids... or your partner!

Live to your means -

Living like a king on a pauper’s income is a sure recipe to disaster.

Don't keep up with the Joneses -

Just because your next door neighbours has the latest & greatest gizmo doesn’t mean that you must have it. If you can’t afford it then don’t get it. Be disciplined!

Cut up the credit card -

It's too easy to fall back on easy credit when you are short on funds. Learn to save for life's luxuries.

Pay off the loans with the highest interest first -

There's no point in paying extra off a home loan at 9% if you are not reducing the 24% credit card bill.

Tags: Family, Financial Planning

Author: Mr Taxman

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