A lot of books have been dedicated to the subject of debt and money. It seems simple enough: don’t spend more than you make. As you know, this is not what reality actually entails. Sometimes it’s the person’s fault: they wanted that new, shiny car, or maybe they felt like going on a shopping spree. Other times it’s merely bad luck – suffering from an unexpected health problem can cause you to spend enormous amounts of money on health care (at least in the United States). But in most cases, the crippling amount of debt that Americans possess doesn’t happen overnight: it gradually creeps up on you over time.

Some researchers refer to what is known as “lifestyle creep”. This is the tendency of Americans to gradually increase their spending at least in tandem with their earning power. When their income falls their spending does not, often due to the fact that they have become used to their seemingly higher standard of living. This is a big part of why Americans average over $16,000 of credit card debt and over $28,000 of auto loan debt. It’s understandable to have unexpected expenses, but because a lot of people don’t save their money appropriately they are forced to take on debt to make these unexpected payments.

The following three tips are some of the most important pieces of advice to follow when breaking yourself free of debt and ensuring that you don’t get trapped by your own finances.

1) Save 10% of your income a month

This is typically given as the ideal amount to save. Understandably, some people make so little that they can’t put away 10% of their income a month. Even if it’s just 5%, over time it will add up to enough money so that an unexpected emergency or expense will not throw your finances into turmoil. A surprising number of these people live well above the poverty line for their area.

The purpose of saving your money is not to serve as an investment; interest rates in the past several years have been so low that you won’t gain much of value by sticking your money into a savings account. Don’t think of it as a safe investment so much as a cushion. If you find yourself needing money for any unexpected reason, it’s there for you.

2) If you have to go into debt to buy it, you can’t afford it

I’m not referring to major investments – very few people can afford to buy a home in cash. What I’m referring to are the smaller things that aren’t essential for survival. If you want that new TV but the only way you can afford it is for it to go on your credit card, then you can’t actually afford it. If you eat out frequently and you have to put it on credit to do so, then you are spending money you don’t have. The annual percentage rate of credit card interest frequently exceeds the double digits, and as a result the interest you pay on that debt winds up costing you more in the long run.
Paying with a credit card by itself isn’t a bad thing. This is how you establish and build a credit history, which increases your credit rating and allows you to qualify for better loans and interest rates in the future. But if you are going to charge something to your credit card, make sure that you could afford to pay for it in cash if needed. Following this simple rule will help you avoid a lot of unnecessary purchases in the future.

3) Make a budget and track everything you spend

For many individuals, the phrase “out of sight, out of mind” applies especially to spending money. It’s easier to spend when you are putting things on a credit card, because you aren’t actually seeing physical money leave your hand when you buy. And all those days you went to eat out? Sure, one night might only cost thirty dollars. Do it several times a week and you’ve wound up consuming 20% of your monthly pay.
Frivolous expenses add up a lot faster than people realize, and the best way to get a handle on what you are spending each month is to keep meticulous track of your cash flow. Measure every cent you earn, and measure every cent you spend. Even if it’s for a 99 cent candy bar, track it. This will allow you to measure what you are spending as a percent of your income, and if you are positive or negative in finances each month. Your income level matters a lot less than you might think.