If you want to scare people about a particular topic, a long established method has been to use a statistic or large number. Numbers are stark and honest in a way that words are not. That said, did you know that consumers in the United States collectively owe 11.91 trillion in debt? To keep that in perspective, the much discussed National Debt owed by the Federal Government was 16.3 trillion at last count. The household statistics under the umbrella of consumer debt are disturbing as well, with the average household having 13 payment cards of some sort, $3762 in revolving debt and a massive 40% spending more than they made. If you want to avoid being a part of this percentage, it is time to stop doing the bare minimum, if that, and take some serious steps toward paying off your debt. For those that want a debt free life, here are four tips to help get you there.
- Set a Budget: Nothing else can be accomplished until you do this. First, figure out your monthly expenses, and keep it realistic and honest. This for you, not to impress someone. Your income minus your monthly expenses are your discretionary income, which you must divide between your creditors based on the size of the debt and the interest rate. One positive result of this gloomy prospect is if you manage your finances with an accurate budget, can prevent the formation of debt in the future.
- Autopay: When people start looking for ways to reduce debt, making payments feels good and productive. As time goes on, however, and the debt remains, excuses to miss a month become easier. No matter how small your budgeted monthly payment is consider setting up automatic payments so those self-sabotaging excuses do not take hold.
- Cut Costs: This is the painful part of debt repayment, where a person examines all of their monthly spending to determine how to eliminate items in order to save money. No one wants to stop going out to eat, but paying off debt should always be a higher priority or it will never be accomplished.
- Ask for Help: With debt being such a common problem for American citizens, no surprise should accompany the fact that companies, called credit counseling agencies, have sprung up to help consumers accomplish the goal of paying it off. Getting help from these professionals can include help with your budgeting for monthly expenses, establishing a payment plan, as well as advice on how to manage your money.
Getting out of debt can be a long and arduous process, but a goal can never be accomplished without those first steps. By taking these, you will be will on your way to realizing your dream of living debt free.