10 tips to stay out of debt

Balanced books are part and parcel to balanced living. It’s an extremely basic principle: spend less than you earn. Apparently this equation is not as simple as it appears, as the Certified General Accountants Association of Canada reported that in December 2010, household debt in Canada peaked at $1.41 trillion. That ain’t a pretty picture.

Here are a few tips to help keep you in the black and out of the red. As always, the best advice I can give is reduce, reduce, reduce.

  1. Pay with cash. Cash helps you keep track of how much you are spending. I can’t count how many times I’ve opened up my credit card statement and been slapped in the face with purchases I completely forgot I had made.
  2. Speak to a credit counseling service to help you manage your debt load.
  3. Make a budget. List your take-home income and all your expenses including those little ones we often forget about but add up in a hurry like eating out, entertainment, gas, clothes, etc.
  4. Stick to your budget. Discipline is the most important piece to the puzzle and the one that seems the most elusive to our generation.
  5. Have only one credit card and keep the limit on it low. I have to admit I now have two credit cards. But I got a free box of cookies for signing for the second one so you can hardly fault me for getting it.
  6. Seek out non-material sources of fulfillment. Buying your way to happiness never works and is a sure way to debt. Start getting into the habit of doing enjoyable but cost-effective activities like going for walks, visiting friends, playing a game of Ultimate Frisbee in the local park or checking out a free public event.
  7. Adjust your lifestyle. Instead of buying a new book, borrow one from the library. Instead of going out to a full dinner with a friend, meet them for tea or a beer. Instead of going to the movie theatre, rent a flick from the video store.
  8. Don’t get sucked into the social money traps. Make an agreement with your friends and family to not exchange gifts at Christmas. Buck the trend during wedding season by not buying expensive gifts for the couples’ engagement party… and their shower… and their stag and doe… and their rehearsal party… and their wedding…
  9. Pay your credit card bills off as soon as they come in. Credit card companies make their fortunes on their outrageous interest rates. Don’t put yourself in a position where you’re attacking the interest on your bills and not the principle.
  10. Pace yourself. We are a generation of instant gratification. We want the biggest place with the best stuff right now. Learn a bit of patience. The next time you’re at Ikea and you see 50 items you absolutely MUST have, calm yourself, pick one and tell yourself “I’ll come back after a few pay cheques to get some other stuff.” Limit any luxury or medium to large purchases to once every few paydays to avoid diving into debt.


Funny stories. Good advice. Josh Martin is author of the book “Simple(ton) Living: Lessons in balance from life’s absurd moments.” Click here to learn more and to purchase a copy.

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