Finance

Creative ways to get out of debt abound on the Internet and elsewhere. Yet do these shorthand techniques really work for people, or must you labor to terminate your debt and repair your credit rating? It really all depends on where you are in terms of your income cycle. For instance, young people can afford to be slightly less careful with their financial planning.

Of course, theres a huge danger to treating debt cavalierly. Consider my situation. After living a debt-free existence for most of my adult life, I recently decided to take on some rather big purchases. I leased a new car, bought jewelry for my girlfriend, and furnished my apartment with nice wooden furniture from posh Beverly Hills boutiques.

The Wrong Way to Get Out of Debt
Unfortunately, to make payments on all of these purchases, I had to use my credit cards. While Ive been extremely good about paying off my credit card debt at the end of every month, Im not sure Ill be able to afford dispatching my bills so quickly this month. As a result, Im going to be taking on significant debt for the first time in my life.

While I remain confident that this is but a minor setback, theres a huge lesson here for the consumer. Even as someone educated in financial planning, Ive ended up in debt. No matter how much education you get in terms of financial management, reckless purchases can still interfere with smart fiscal planning–so keep a strict accounting of your expenses to avoid getting into a similar mess.