Develop a money management strategy to avoid debt

Consumers who have been in heavy debt before, or are just starting out and trying to avoid taking on high balances, know the importance of using certain financial tools and resources to manage their finances. Creating a budget, curbing spending and putting money into savings are the most common and effective ways of establishing a strong financial platform. However, developing a full-blown money management strategy to live by can put consumers in an even better condition because the way they think about money may prevent them from making decisions in the future than could hamper their finances.

First and foremost, it's crucial to save money. In some cases, adults may start by saving money, then become less disciplined as they take on new bills. In other cases, they may decide to use the money they would normally allocate toward their monthly savings to make a big-ticket purchases or cover other discretionary costs. These scenarios can sneak up on adults and eventually result in them saving less than they should. To combat this, consumers should carve out an amount of their paycheck that they can put into savings each pay cycle, whether it be 10 to 15 percent or only 5 percent. To avoid the temptation to spend, treat this percentage as another bill that needs to be paid. Those who are trying to put themselves in a better financial position would not willingly neglect their bills, so they also shouldn't neglect their savings initiatives.

The desire to overspend can be contagious when individuals are hanging out with other spendthrifts, according to CNN Money. Shopping trips, dinners and entertainment can creep up over time and not only derail a consumer's savings, but also lead them down the dangerous path toward credit card debt. So when adults know their friends or relatives are going to want to go shopping or eat a fancy restaurant, setting a spending limit can be a great way to spend time with loved ones without breaking the bank. Adults can curb their spending by only carrying enough cash to meet their spending threshold and leaving credit cards at home.

Lastly, housing costs typically make up the largest percentage of a consumer's monthly expenditures, and going small can save both renters and homeowners a great deal of money over the years, CNN Money reports. Purchasing or downsizing to a smaller home will afford adults lower monthly payments, insurance costs and maintenance expenses. In addition, adults who are struggling to maintain their current payments can enroll in housing counseling to find other ways to cut current costs.