The majority of people have too much debt to bear. With multiple credit cards, impulse purchasing, failure to save and of course, this economy, many people are finding it difficult or impossible to keep their head above water. The following article will demonstrate five effective steps you can take to take control of your finances and stay out of debt.

1. Limit yourself to a single credit card. This will make managing payment easier and minimize the amount of interest you pay. Make the payment in full every month and anticipate this bill whenever you are shopping and might be tempted into an impulsive, extravagant purchase. Of course, we all want an even wider-screen television or an even smarter smart phone, but can we really afford it?

2. If it feels too expensive, it probably is. When you experience hesitation before sinking a lot of cash into an item, it’s because deep down, you know the purchase is just too much for you. It may be that the price is out of your range, or the product is simply a luxury you do not have the resources for. Prior to spending a significant amount of money, give yourself a night to sleep on it, or better still, call a trusted relative to advise you on the necessity and potential burden of the item. Once the exhilaration of possible ownership has passed, you will be more inclined to make the smart decision.

3. Budget your money down to the last penny. Know what you must spend and allot for it. From there on, only permit yourself limited spending and on specific purchases. A four dollar latte, five days a week can add up to more than a thousand dollars over the course of a year. Invest in a travel mug, find a great home brew and redirect those formerly wasted funds to something more worthwhile. Keep your budget right on the fridge and use red ink or highlighting to make your monthly limit jump right out at you, every single day.

4. Start an emergency fund. Contribute a certain amount to it automatically, every week. Even a modest dollar figure will add up quickly, and you will be prepared should for example, your car break down or an unexpected medical expense arise. Your emergency fund should only be used as a back-up to keep you on budget; it is not a fun fund or permission to splurge.

5. Set yourself up for retirement, now. Once you have a solid budget and have learned to follow it, look ahead. Since you will no longer be playing financial catch-up or living paycheck to paycheck, you will be in the enviable position to start planning for the future. Having a good financial head on your shoulders will enable you to see the big picture and should prevent you from blowing the budget on frivolous fancies. Once you start your nest egg, you will find that you have a natural instinct to protect and nurture it, and a fierce resistance toward old and self-destructive financial habits.

Avoiding debt is a challenge, but failure to meet that challenge will result in devastating consequences. With a little planning and self-discipline, you can implement a sound financial strategy that will not only keep your head above water but will even allow you some well deserved breathing room.

There are some people who can afford an accountant to manage their finances and of course their debts. Nowadays, if you don’t have the extra budget to manage your finances, you can easily download some software to assist you in the process. A sample is austin quickbooks which you can buy online, much cheaper than hiring an accountant. These quickbooks austin would just have to be installed on your computer and there is a step by step process on how you can easily input and manage your money.

Anyway, you can consider these tips by the first of next month and see how far they can carry you away from debt and onto a better financial path. Goodluck!