There are two simple ways of avoiding debt: (1) not letting your necessary bills (heat, electric, etc) become overdue, and (2) not using a credit card or taking out loans.  If you are in a decent financial situation, the first rule shouldn’t be too difficult to follow, but the second seems almost impossible to adhere to in today’s society.  Our system is set up in a way that makes it very difficult to get ahead without borrowing money from credit card companies, etc.   Here are some simple things you can do to avoid debt:

• pay with cash when you can
• make a reasonable budget for yourself and stick with it
• be a conservative shopper, don’t make impulse buys
• when going out, only take the amount of cash with you, that you can afford to spend
• consider transferring your balances to a lower rate credit card
• don’t apply for more than one credit card at a time
• only use your bank’s ATMs, to avoid extra fees

Credit Counseling

Most of the time, when you see an ad that looks too good to be true, chances are, it is.  This is where you should ask yourself, “if this is so effective, why isn’t everyone using it?”  Although many reputable credit counseling organizations exist, there are many credit counseling scams out there that market themselves toward people with bad credit.  For a small fee they promise to clean up their credit reports.  More often than not, no significant changes to the reports are made, and the debtor is left with less money, and sometimes even more debt.  If you are thinking about going this route, keep the following things in mind:

• check with the Better Business Bureau for reputable organizations
• non-profit organizations are usually the best (they aren’t primarily in it for the money)
• steer clear of up-front fees
• closely examine any agreements or contracts offered to you