Debt is hardly unique to many American households, especially when you consider that the average amount of credit card debt per person is $5,000.
You add that figure up and multiply it by the number of households, then factor in other debts like loans and store cards and you don’t have to be a math genius to work out that there are a lot of people carrying a debt burden through their lives.
When you don’t have access to an emergency fund, credit can quickly become your only safety net. Having a lot of debts in different places can quickly add up to some challenging individual monthly payments to find, which is why companies like Debt Consolidation USA offer one solution, to help you get a plan that will help you to get out of debt and be wiser with your money.
To get a proper money makeover and be able to get out of debt, there are a few things you need to look at, which will help get things straight in your mind and also on you your personal balance sheet.
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Bad Money Habits
One of the fundamental points regarding your financial situation that you need to take a close look at, is what bad money habits you might have.
Many of us view money and financial issues in slightly different ways. Some of us will bury our head in the sand and pretend that there isn’t a problem and others will spend all their time worrying about their finances and their psychological health can suffer as a result.
Get a blank sheet of paper and write down a list of everything you owe and what you have to pay out each month. Be honest with yourself and don’t miss anything out or fudge the figures, as you would only be kidding yourself.
Look back at what you have been spending on in the past and if necessary, seek some independent advice on how to resolve any problematic behavior regarding money. You need reflection and an element of patience in order to change your money habits for the better and move forward.
Have a Spending Plan
One of the best ways to resolve your financial problems is to create a spending plan. This means that you need to use an itemized list of your income and expenses to create a budget.
A budget can help you avoid spending money you don’t really have and live within your means and it can also help you to see where you can make savings, which could allow you to reduce your outgoings and then put some spare cash away for any emergencies, rather than take out more borrowing.
Work as a Team
If you are trying to fix your household expenses and there are more than one of you in the family home who share the monthly bills, you need to call a team meeting and work through the figures together.
A joint effort at solving financial issues can often produce greater results and it does help many people to share the burden and talk about their financial issues, even if it seems awkward to start with.
Cutting back on spending is generally easier than cutting out altogether so if you go out to a restaurant twice a week and your finances can’t really justify it, cut back to one night out or get a take-out which is cheaper, but still fun.
Family decisions on finances rather than executive decisions often work better and you should remember that there is absolutely nothing wrong with sitting down with your children and telling them that there are some things you can’t afford to spend money on, in fact, it can also teach them a valuable lesson on the difference between needs and wants.
Paying Your Way To Get Out Of Debt
Clearing your debts and getting wiser over money in general, is not something that is going to be fixed overnight.
Try to pay more than the minimum on credit cards and also see if you might pay a lower interest rate overall, if you consolidate your loans into one payment or pay off the most expensive borrowings first as a way of cutting your interest burden.
Do not be tempted to add to your debts, so don’t be tempted by an offer to increase your credit limit or a new store card to finance a major purchase.
Get out of debt, which means giving yourself a money makeover and getting wiser about how you spend the cash that you earn.
Lizzy Bale is a happily married mother of three who loves to enjoy life one day at a time. She loves the outdoors. She loves hiking and swimming the most. She likes to contribute her experiences with personal finances, get out of debt, and managing the household budget.