Do dream that you’re not buried under your blankets at night, but instead buried under a pile of debt? You may not be the only one suffering from the sinking feeling of trying to pay your bills.
According to the Statistic Brain, the average American has $2,200 worth of credit card debt, and this is just the beginning. Consumers in total owe around $11.13 trillion, while the national debt rises by an estimated $75 million ever hour, according to CBS news reports.
Clearly, we as a nation could use some debt solutions. However, you should start with your own debt first before worrying about everyone else. It may be hard to come by sound debt advice these days; you may have a neighbor offering the “best” debt solutions ever, only to find they don’t work for you. Everyone’s financial story is different.
But here are the most sound and logical first-step debt solutions to take if you have a low to moderate amount of debt piled up.
- Spend less than you earn: This seemingly no-brainer solution should be easier than it is, but many people struggle with this concept. In order to track how much you’ve been spending, take a reasonable amount of money from your checking account on Monday and make it last the whole week.
- Understand your liabilities: Take ownership and understand exactly how much you owe, when you owe it, and why you owe it. Open a spreadsheet and include monthly payments, interest amounts, balances, etc. to stay organized.
- One card to rule them all: One credit card? Yes. It isn’t that unheard of. Don’t be tempted by the enticing rewards other cards offer because chances are you will not be able to pay off those cards either. Stick with one, and only charge the essentials — such as gas and groceries to it.
- Seek out debt management programs: These programs are specifically designed to fit your particular debt situation. The counselor will be able to tell you what debt relief options will work best.
- Don’t overpay debt: This may appear counter-intuitive, but you need to leave enough money so you have enough for regular expenses, too. Don’t just channel your earnings into over paying your debt.
- Rethink how you socialize: Do you eat out more than three nights a week? If so, you should think about cooking your own meals. Also, find cheap and/or free ways to spend time with friends instead of blowing cash at the movies or at a salon.
- Look out for looming expenses: If you rent a home, always be aware of the amount you need to pay before you pay it so there are so surprises; save enough money to pay off the large expenses.
- Snowball effect: Pay the minimum amount on any purchase you’ve made with a credit card. Pay off the small balances in full, if you can, and more on to the larger costs next.
- Understand your spending habits: If you recognize what you tend to spend your money on, you can more easily prevent yourself from going overboard and recognize when you “want” versus “need” something.
Learn more about this topic here: www.thedebtmanagementgroup.com