Tips on how to avoid getting buried in debt

Have you ever had someone reach out to you for help with their loan repayments? Or maybe you know someone quietly going through that struggle? It makes you wonder, what led them to that point? How did things become so overwhelming?

Loans can be a powerful financial tool when used wisely. But sometimes, due to unexpected circumstances or lack of guidance, managing them can become difficult, and that’s when debt can start to pile up.

If you want to make the most of a loan without the stress of falling into unmanageable debt, here are a few helpful tips to guide you:

1. Don’t go beyond your means

It may sound like a basic tip, but let’s face it, many people end up buried in debt simply because they overlook this important first step. Some tend to overuse loan opportunities, and before they know it, the borrowing gets out of hand, leaving them with multiple loans they can no longer afford to repay when the time comes.

2. Stress test your finances

   
   

To see if you can truly manage your loans, try stress-testing your finances by imagining a situation where things don’t go your way or unexpected challenges arise. By doing so, you’ll get a clearer idea of what you can truly afford. For example, if your main income suddenly stops but you still have another way to make your loan payments, that’s a good sign. But if that backup source can only cover just enough. With no room for extra costs, it shows you're already at your limit. This helps you realize how much loan you can safely handle without putting yourself at risk.

3. Limit Borrowing

   
   

Another common mistake is when people accept the full loan amount offered by the bank without carefully considering whether they can realistically manage the repayments. It’s important to remember that a safer level of debt is typically around 60–70% of your property’s value. This helps maintain healthy cash flow and lowers financial risk.

4. Be Cautious with Unusual Loans

If the only options you’re offered are complex or hard to understand, it could be a red flag that the investment may not be as secure as it appears.

Falling deep into debt is something many people struggle to recover from, often resulting in a difficult and overwhelming life. 

While we can’t judge them since everyone faces different challenges and circumstances, many of these situations could have been avoided with the right planning from the start.

That’s why it’s important to keep this in mind: Before taking out a loan, make sure you clearly understand the repayment terms and create a realistic plan for how you’ll manage repayments. Always know how you’ll pay back the loan before you commit to it.

Reach out to us, and together let’s manage the right plan for you!

References:

10 Strategies to Avoid Getting into Debt. (2025). Centralbank.net. https://www.centralbank.net/learning-center/budget-and-save/easy-budgeting/strategies-to-avoid-debt/

Getting Loans | Financial Literacy. (2024). Yale.edu. https://finlit.yale.edu/getting/getting-loans

Lampron, L. (2016, August 8). How to Avoid Getting Buried By your Debt. Nisivoccia. https://www.nisivoccia.com/avoid-getting-buried-debt/