Being buried in debt is an all-too-common issue for Americans. Not all debt is bad -- for instance, mortgages and student loans have low interest rates and can purchase things that have lasting value -- but credit cards charge extremely high interest rates. Credit card debt has gone up 2.7% since last year, and the average balance on credit cards is $6,354.

One way people get themselves into trouble is by purchasing expensive things they want with credit and assuming they'll figure out how to pay the bill later. It's the constant temptation of having a credit card.

No one wants to be in debt, but denying yourself every vacation and product you want isn't much fun, either. The better approach is to plan for those big expenses to lead the kind of life you want -- without going broke in the process.

Roll Of Money Gift Wrapped In a Red Bow On Top Of More Cash

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The cost of credit card debt

Given credit cards' average annual percentage rate (APR) of 16.13%, you don't want to carry a balance. If you have a card with the average APR and balance ($6,354), then $82.60 of your monthly payment will go toward interest alone. That's expensive even if you can pay off the debt in a few months; if it takes you years to do so, you'll pay thousands.

Credit card debt also takes a serious toll on your mental health. It's hard to lead a stress-free life when you have debt hanging over your head. That's the trap with using credit irresponsibly: You get a short-term rush from buying something you want, and then a long-term headache as you pay it back with interest.

How to use savings targets

Savings targets are an excellent way to buy what you want without taking on any debt.

First, check the cost of what you want to buy and decide how soon you want it. If it's something that doesn't have a fixed price, like a vacation, then you can go with your closest estimate.

Next, divide that amount by the number of months you have to save. That will show you how much you should save every month. After that, it's just a matter of shifting more income into a savings account. Remember that this should come from disposable income, not your retirement savings. You may find this easier if you set up a separate account for this purpose.

This takes much longer than charging something to your credit card, but when you eventually make the purchase, you'll feel like you've earned it.

The benefits of saving before you spend

It doesn't take a finance major to see the biggest benefit of saving first and splurging later: You'll never pay any interest. But that isn't the only perk.

Working toward savings targets is a great way to become more financially disciplined. As you say no to instant gratification and stick to your plan, you build habits that will help you manage money properly for the rest of your life.

Best of all, you don't need to choose between being responsible and buying what you want. If you'd like to spend $2,000 on a trip or $1,000 on a jacket, you can. Just find a way to save that money first so you're not spending $2,000 on a trip and another $3,000 on interest.

Staying debt-free is all about taking a long-term view of your finances. Buying on credit gets you what you want immediately, but at a cost. Saving may not get you that initial thrill, but you end up with less stress and more money.

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