It's quite common nowadays for us to get into debt. But in the first place, how do we avoid getting into unnecessary debt? So there are a few ways but these are the top four ways that we use at Modern Muslim Finance.

Plan Your Spending

So the first method is of course, number one: Plan your spending.

Basically have a budget. Remember in our earlier videos, we talked about having a plan to spend your money. So having a budget helps you plan where your money goes and you spend on things that you really really love and cut back mercilessly on things you hate.

Pay Your Bills In Full

Number two is to pay your bills in full.

Always pay your bills in full. Have you ever paid something late and sometimes you get that late charge or in the case of a credit card, you even get interest. We call it financing. So we call that finance charges. So you want to pay all your bills in full because all these little late charges, finance charges, little penalties that you pay they do add up over time. And so in the end, you end up paying a lot more than what your original bill was. Remember, always pay your bills in full.

Use A Debit Card

The third thing is to use a debit card.

Now the difference between a credit and a debit card is quite simple. The credit card requires you to pay back later. You're effectively using the bank's money first. Whereas a debit card deducts directly from your bank account. So if you were to use a debit card and there were- was not enough money in it, the card would get declined. That's it. So you know you don't have the funds to spend on that day. It's a great way to keep you in check when you know that "You know, ugh, I just feel like spending something. Let's put it on the debit card," okay? I personally use a debit card. It saved my life multiple times.

Think Twice

Step four is very simple, think twice.

It's always about needs versus wants. Do I really need that new toy right now or do I just want it? Sometimes taking a step back and examining whether we really want it or whether we truly need it really helps us control our spending and instead of getting into debt we say "hey, let's wait we can always delay that purchase the next month when we can afford it." There's really no point into getting into debt for something that you know you can just wait next month for. So that's it. Think twice.

So here are the four steps to avoid getting into debt in the first place, the Fuss Free Finance way. The first step is to plan your spending. The second step is to always pay your bills in full. The third step is to use a debit card. Step four is always taking a step back and examining whether it's a need or it's a want. Can you
delay until next month?

What are other ways that you do to avoid debt? Share with us in the comments below.