15 Ways to Stay Out of Debt in 2022

Landing in debt can be problematic in several ways. First, it could create a scenario in which you're burdened with monthly payments and loaded up with interest charges. Too much credit card debt can also damage your actual credit score, making it harder to borrow money when you want or need to. If you'd rather steer clear of debt in 2022, here are some essential moves to make.

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A budget will help you manage your spending and figure out what your various bills cost you. And that could, in turn, prevent you from overspending in certain areas. You can set up a budget in a notebook, on your laptop, or by using a budgeting app.

By the time you're done paying your essential bills, you may not have that much money left over for leisure. That's why it's important to prioritize your nonessential spending. Figure out where your money should go so you keep that spending in check.

Restaurants are notorious for charging big markups on food. And eating out too often could lead you into debt. A better bet? Cook most of your meals at home, and save dining out for special occasions.

Gas prices have soared recently, making it more expensive to commute. If you're no longer working remotely, it could pay to put together a carpool to lower your fuel costs -- and avoid a scenario where you rack up a huge credit card tab because of them.

The upside of using credit cards to shop is racking up cash back and reward points. But if you're worried you'll go overboard, leave those cards at home and shop with cash instead. If you don't bring extra money along, you'll force yourself to avoid impulse buys.

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Housing may be your largest expense. If you're worried it could help drive you into debt, see if there are ways to lower it. If you're a renter, you could try to downsize to a smaller space. And if you own a home, you can see if refinancing makes sense.

You may have big events on your 2022 calendar, like a friend's wedding. Socking money away for those events in advance could help you avoid a scenario where you're forced to put related expenses on a credit card and pay it off over time.

ALSO READ: Borrowing for a Wedding? 3 Costs You Can't Afford to Overlook

Maybe you're planning to update your furniture or purchase new electronics for your home. It pays to do your research before buying these items, because the less you spend, the less likely you'll be to rack up debt.

If you have credit card rewards, you may want to convert them to things like gift cards or merchandise that allow you to enjoy life. But if you're worried about debt, and you can get cash back from your credit cards, send that money into your savings instead so you'll have it available to pay bills with.

Having money on hand for unplanned bills could be your ticket to avoiding debt. As a general rule, it's a good idea to sock away at least three months' worth of living expenses in a savings account. Even if you have stock investments or money in a retirement plan, you should make a point to have some cash at the ready in a regular savings account, where you can take withdrawals without repercussions.

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Boosting your earnings could make it easier to manage your expenses. And so it pays to pick up a side hustle that works for your schedule, whether it's tutoring, driving for a ride-hailing service, or designing websites in your spare time.

ALSO READ: Could Your Side Hustle Make You a Millionaire?

Sometimes, people overspend due to peer pressure and then land in debt as a result. If you want to avoid having that happen, you may want to cut back on social media -- or stay away from it altogether. Social media often paints a misleading picture of other people's finances, which could lead you to make poor decisions for yours.

Tempting as it may be to pay someone to stain your deck, mow your lawn, or do whatever other maintenance tasks are necessary for your home, all of those expenses could really add up. And so if you take on that work yourself, you might spend a lot less and lower your likelihood of ending up in debt.

If you use credit cards, it's a good idea to review your balances every week. That way, if you see that they're getting too high, it'll signal you to cut back on spending and avoid a debt situation.

Because consumer debt is so common, it's easy to regard it as no big deal. But actually, landing in debt could hurt your finances in a number of ways -- therefore, it wouldn't hurt to occasionally remind yourself of those negative consequences. If you're hoping to buy a home, for example, too much debt could make that difficult or impossible. And that's just one example. Think about your personal goals and how a pile of debt might impact them.

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People are often surprised at how easy it is to land in debt. Follow these tips to avoid that scenario -- and protect yourself financially.

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