How To Avoid Debt And Live Below Your Means

Are you always living from paycheck to paycheck? Is there nothing left for savings or emergency when you make your budget? Do you have to pay back debts when you receive your salary? Are you constantly finding it hard to pay bills and rent? If the answer is yes for all or most of these, then you, my friend, are living above your means. People who live this way remain stagnant and cannot upgrade their life and attain financial freedom. So, in this article, I will share simple and  practical steps on how to avoid debt and live below your means.

How To Avoid Debt And Live Below Your Means


A lot of people in Nigeria are living in debt. Granted, sometimes it is because people need to provide basic needs for their family when they can’t afford it. Other times, some folks just want to spend money to sustain their current lifestyle, even when it’s higher than their net income. This is how they get into the debt cycle.

The debt cycle has to do with borrowing money to service a need and using income to pay it back then borrowing again because there’s no money.

People stay in debt because they have developed a mindset about debt and money. A couple of things they tell themselves that keeps them in debt are.

  1. It is normal to have debt.
  2. Understanding how to make budgets and planning my finances is hard.
  3. I might never make enough to get out of debt.
  4. It’s impossible to make the sacrifices needed to live debt free.
  5. I have to borrow to show people that I am in this class also.
  6. I can’t wait till later I have to get it now.

This is simply not true. It is possible to put certain structures in place so you can avoid debt and live below your means.

Why Debt Is Bad

  • When you know you can easily access a loan, you spend recklessly and regret it when it’s time to pay back.
  • Borrowing from online lenders (when it’s for personal use) will cost you money as you will have to pay back with interest.
  • It keeps you from enjoying the money you will get in the future.
  • If you buy things on credit, you will buy it at a higher price than it actually is. For instance, if you buy a ₦30,000 phone on credit and the interest on it is 20%, you would have paid ₦36,000 by the time you’re done paying for it.
  • Debts can ruin relationships, cause you to lose assets and cause emotional trauma.

When It Is Good To Have Debt

Borrowing money is not all bad though, there are situations where taking a loan is good rather than bad. If you are financially responsible, you can take out a loan to invest in a lucrative business, you can also borrow to start a business of your own. Basically, anything that might increase your net worth.

Why Living Below Your Means Is Good

Besides the obvious fact that you will be debt free, you will be free of anxiety, you will have the freedom to build your wealth by saving and investing your money. Another benefit of living below your means is that you will have control of your life and you will have financial security so if there’s ever an emergency, you will not be stranded.

How To Avoid Debt And Live Below Your Means

  • Pay With Cash: It is best to pay for whatever you are buying with money in your hand or in your account. If you don’t have the money at that point in time, wait till you get it. Resist the urge to borrow to pay for it. Instead of buying things on credit because you do not have the money, save until the money is complete.
  • Stay Within Your Spending Limit: Most of the things people need can be gotten at different prices. Whether it’s a house, car, clothes, phones, whatever it is, you could get one that has a cheaper price. Always buy things that are below your net income.
  • Save Money: No matter how careful and disciplined you are with your finances, a time will come when you will have an emergency that requires you to spend money there and then. Saving money regularly will help you to be always capable of doing so instead of going to borrow money.
  • Always Budget: One of the things that makes you effective in controlling your spending, tracking your expenses and saving money is budgeting. If you’re in debt, budgeting will help you quickly pay off your debts. People who make good financial decisions and remain focused on their long term financial goals are people who have made a habit of budgeting their money regularly.
  • Second Source Of Income: You can get another source of income, even if you have a 9 – 5 job. Starting a side business is a good way to multiply your income stream. There are a few businesses that will not require much of your time so you can run it while having a job.  With your earnings from multiple income streams, you will have money to save and invest and pay your bills at the same time.

Bottom Line

It is vital to have some money left over at the end of every month. The road to financial freedom starts with staying out of debt and living below your means. It is doable just remember, you can always start saving a little of your income and grow from there.


Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>