Plan Early To Stay Ahead Of Debt

Online, April 16, 2012 (Newswire.com) - Most people had a part-time job when they were kids, whether it was a paper route, babysitting or working at a local store. Whatever you did, chances are you weren't too worried about savings at the time.

Oh, sure, you probably saved up to buy a certain toy or piece of sports equipment, maybe even a car - but saving toward retirement? That surely didn't enter your mind.

When you got out of college, you probably did what most college students do. You got a job making a decent amount of money, and you quickly began buying up things you couldn't afford before. The problem with this is that you aren't saving toward retirement and you are amassing debt, especially if you are using credit cards, which are often offered freely to recent graduates.

So now that you are well into adulthood and are making a good living, you find yourself saddled with debt - and you're back to eating Ramen noodles, just like in college.

How do you avoid finding yourself in this predicament? Learn when you are young how to properly manage credit and deal with debt - this is key.

First of all, forget about what you don't have, and focus on what you do have. In other words, don't run out and buy things just because you finally have the money. Instead, remember that the financial decisions you make today will have an effect on your overall financial picture tomorrow. So focus on saving more and pay off your debt now.

The easiest way to do this is to think of your money in thirds - one-third goes to savings, one-third goes to spending and one-third goes to pay off debt. This way, you are regularly putting money into savings, just as a part of your regular habits, and you're paying off your debt before it becomes unmanageable.

It's also important to set up and stick to a budget. Figure out how much you have coming in and going out each month, and determine if there's a balance. If not, make adjustments. Without adjustments, you'll find yourself sinking into debt and financial failure - you may even wind up with bad credit.

It's also important to plan ahead. How much money do you want to have at retirement? It may be a heavy duty question when you're in your 20s, but it's one you have to ask in order to map out a plan to get there.