Are you one of the people that will buy any item whether you actually need it or not? You could also be the kind that tries to impress others by taking them to drinking sprees or buying expensive gifts for girls who not even close to you just to create an impression of a "loaded” guy. Since these antics are not for those that understand money issues, here are some tips to help you avoid falling into a debt trap:

Create a budget

Most are budget averse, but creating a budget helps you plan for your income and expenditures, and determine the areas to prioritise going forward. This of course depends on ‘size’ of your salary.

Edigold Monday, the Crane Bank Rwanda managing director, advises salary earners to budget for their routine expenses in daily, weekly and monthly categories for proper management and planning.

"If your expenses at the end of the month exceed your earnings, know there is something you are not doing right and examine your plan,” says Monday.

She says once you understand your current budget, the challenge is to find places where you can add or cut to ensure you spend within your means,” she adds. Monday advises against impulse spending, saying it is important for people to spend within their means.

Distinguish between needs and wants

Monday says asking yourself questions, like "what do I want?” "What do I really need?” and "Why do I want it?” will guide you on how to come up with a clear picture of what you actually need and want to spend on. She cautions against borrowing money for consumption, saying money must be invested to create more wealth and ensure your financial future.

Monitor expenditure

The banker says it is important to monitor your expenses, noting that this helps you identify areas that may be eating into your income. "Once you do this, you will be surprised that you have been spending hundreds of francs on say, on eating out,” she says.

She adds that such expenses can be avoided by preparing your own meals which could be much cheaper compared to eating in hotels. However, do not strain yourself to the extreme in the name of cutting costs, be realistic to ensure you save and lead a normal life.

"Cutting unnecessary expenses will help you fulfill your wealth-creation goal and meeting unexpected costs,” Monday notes.