Ways to manage your finances & avoid falling into a debt trap

LIVING WITHIN YOUR MEANS | Create an emergency fund and buy health and life insurance

- SANJEEV SINHA

DEBT CAN BECOME a significant burden, if not managed properly. It can lead to financial stress, hamper your savings and restrict your future financial goals. To maintain a healthy financial position and avoid falling into bad debts, here are some essential strategies to consider:

Prepare a budget

Create a realistic budget that outlines your income and expenses. Track your spending habits and categorise your expenses into needs and wants. Allocate funds for necessities such as housing, utilities, and groceries, and set aside a portion for savings. By sticking to your budget, you can avoid overspending on non-essential items.

Create emergency fund

Build an emergency fund to handle unexpected expenses. Having a safety net helps you cover unforeseen costs without relying on credit cards or loans.Aim to save at least three to six months worth of living expenses in your emergency a cushion fund. This provides during challenging times and prevents you from resorting to debt for emergencies.

Prioritise debt repayment