Staying out of debt takes a few simple tools.

As I mentioned in Part 3, an important aspect of debt consolidation is not to acquire any new debt while you are paying off your current debt.

Sure, some situations may be unavoidable, but there are a few things you can do to help you be successful at getting and staying debt-free.

Make a budget

We’ve all heard that this is a good idea. We’ve all read tutorials on how to do it: gather all your bills, write down all your expenses, come up with a total, set limits, etc. But, if we were the type of people who did things like that, we would probably not be in this situation.

But let’s think about this: you have just gotten your debt consolidation loan approved. All those pesky bills have been turned into one simple bill that you must pay every month. Now is the time to take a big-picture look at your budget.

Not a fortune-teller

The part of the “budget-writing” tutorial is that it asks you to determine how much you will spend on things like entertainment, food and other unpredictable expenses. I have a more simplified version of budget-making.

Yes, gather all your bills. Make sure you know how much your fixed expenses are every month. Add up your payment on your debt consolidation loan, your rent, phone, electricity and any other bill that you pay every month.

Be prepared

After you see how much you are spending every month to survive, buy only what you need. Food, toiletries and sometimes clothing are examples of what you need. Going out to eat and designer shoes are examples of things you do not need.

After you have paid your bills and gone to the grocery store, stop spending. Save your extra cash for those unexpected expenses that got you here in the first place.

A meager existence?

It can be extremely difficult to only spend money on necessities. But remember that it’s only for a little while. When you have finished paying off your debt, you will have extra money to play with again. If you are very careful with your spending, you might even have a savings account built up. But until then, buckle down. And cut up your credit cards.