15 June 2022 1:43

How are people able to spend more than what they make, without going into debt?

What are two things people can do to avoid debt?

Some common-sense rules can help individuals avoid debt — at least the level of debt that cannot be repaid when due:

  • Pay with cash whenever possible.
  • Stay within your spending limits.
  • Avoid impulse purchases.
  • Avoid “buy now, pay later,” “interest-free financing” and like offers that merely postpone debt.

How can a business avoid debt?

How to avoid bad debts in business?

  1. Filter your customers. Not all customers are good for your business. …
  2. Require up-front payments. …
  3. Set reasonable credit limits. …
  4. Provide clear payment terms and penalties. …
  5. Improve your accounting. …
  6. Implement strict collection procedures. …
  7. Use cloud-based software for debt collection.