Always aim to set yourself up to not have debt so that you minimize your risk of making stupid financial decisions. When you’re desperate, you feel you have to take drastic actions. Most of the time, those drastic actions are long shots to actually pay off (a most like playing the lottery). You get blinded by “the opportunity” and gamble with your money, hoping for the big payoff. But in reality, you would be far better served making small, rapid improvements with your money habits.
So how do you set yourself up for success? First, go back and look and your bank statements for the past 3 months. Print them out. Figure out where you’re spending your money…you’ll have necessary expenses (housing, food, transportation, insurance, etc) and unnecessary expenses (“fun money”). What can you cut out to bring your spending down and your savings rate up? And out of your necessary expenses, what is really necessary? Yes you need a place to live, but are you living in a place that is making you house poor? Did you purchase a car with expensive payments? Are you going out to eat every night instead of making a healthy (and cheap) dinner at home? When you complete this exercise, you’ll see just how much extra you’re draining from your bank account. From there, it’s up to you to make a change.