Don’t fall victim to credit card debt

Far too many Americans have fallen victim to credit card debt, but it is my goal to help educate and inform you about the dangers of debt as well as how to avoid it by making smart choices.

Here are five helpful tips that will keep you from falling into the credit trap:

Have a budget, and expect that it will require frequent adjustments.
With a budget, you will be able to live within your means and avoid unnecessary debt. If you want to buy those designer jeans at the mall that cost a little more than you might otherwise spend, you’ll know where you can cut back on other spending, ask for more hours at your after school or summer job, or dip into your savings.

Build your savings as a safety net for your budget.
Because many Americans live paycheck to paycheck, many deal with emergency expenses in the worst way possible: by going deeper into debt. When you go off to college, you should have a savings account for when you blow a tire on your car or someone steals your winter coat at a party. You should never have to go into credit card debt to pay for those expenses.

Use cash as much as possible.
People who use cash spend less. The best example is that when McDonald’s allowed customers to use credit cards rather than cash, the average sale went from $4.75 to $7. Use cash for anything less than $20.

Adjust your spending when your circumstances change.
With the dramatic increase in gas prices, are people using the same amount of gas and doing exactly the same things as before? Maybe with gas prices so high, you need to cut back on clothing or groceries that you really don’t need. Maybe with movie prices so high, it’s time to see fewer first-run movies.

Pay attention to what you’re spending your money on.
Dave Ramsey, in his New York Times bestseller, “The Total Money Makeover,” estimates that 90 percent of people in our culture buy things they can’t afford. You need to understand your needs versus your wants, even at this time in your life. The worst thing you can do is to go into debt to have things you want but can’t afford.

Judge Ninfo is a retired Bankruptcy Judge and the founder of the CARE Program, a National financial literacy program of the bankruptcy community in high schools and colleges in all 50 states.