While managing your expenses is the best way to avoid debt, it can also be an uphill battle. That's why it's important to have a plan in place. That way, you can avoid accumulating debt simply by following a few simple rules. Below, you'll find ten ways to cut down on your expenses, avoid financial pitfalls, and stay out of debt in the process.

1. Make a Budget

Develop a realistic budget and stick to it. Review your budget periodically and revise it when necessary. There are many easy ways to develop a budgeting system such as spreadsheets or online software and apps. These programs will help you determine how much you are spending and saving.

2. Stop purchasing based on impulse

Curb your impulse buying. If you see something that you want to buy, don't! Go home and mull it over. If you do this, you probably won't return to the store to make the purchase. Ask yourself if you really need this object and chances are the answer is you probably won’t.

3. Limit debt

Limit the amount of debt that you take on. A rule of thumb is monthly payments on your debts (not including your mortgage) should not exceed 20 percent of your take home pay.

4. Pay off debts in full

Charge only those items that you can pay off in full when you receive your credit card bill. Don’t get into the habit of maxing out your credit cards and just paying the minimum payment. This irresponsible habit means you’re continually spending more than you have and you are collecting more debt due to high credit card interest rates.

5. Reasonable mortgage and rental payments

Keep your mortgage or rent payments reasonable. Don't saddle yourself with huge housing costs. Only take on obligations that you can easily afford now. General rule of thumb is that rental payments should be either one-fourth or one-third of your monthly income. For example, if an individual makes $3,000 a month and a rent price of $1000 or less will allow him or her to save comfortably.

6. Develop alternatives to spending money

Make it a hobby to develop alternatives to spending a lot of money. Instead of dining out, go for a walk and have a picnic. Rent books and CDs at the library instead of buying them. Try to take advantage of promotions going on in your city. For example, many cities have a day where museums are free or even half off.

7. Invest Wisely

Make prudent investments. Avoid investments that promise a high return, like penny stocks, junk bonds, and speculative deals. The reason that those investments offer a high return is that they are extremely risky!

8. Don’t cosign or guaranty

Don't cosign or guaranty an obligation for someone else. If that person doesn't pay, you will be responsible for repayment.

9. Obtain adequate home and auto insurance

Be sure that you have adequate insurance on your home, its contents, and your automobiles. An individual can have major bills if they do not have adequate insurance. For example, if you were involved in a major car accident due to fault of your own and do not have adequate insurance, you may be responsible for most of the cost of repairs and damages out of pocket.

10. Obtain adequate health insurance

Be sure that you have adequate health insurance coverage at all times. Health bills can pile up and be in the thousands of dollars. It would be in your best interest to have health insurance to protect yourself from being obligated to pay expensive health bills.