Do you wake up in cold sweets at night thinking about the debt you have? Or feel guilty or ashamed to admit how much debt you really have? The truth is a lot of Americans have debt. Even those who make a good income can have debt. Look at these stats:
US National Debt ≈$15.5 trillion
U.S. Personal Debt ≈$16 trillion (outstanding balances on mortgage, credit card and car loans, student debt)
Personal debt per person ≈ $51,960.
Savings per family ≈$4,361
So the first place to start is by forgiving yourself and letting go. You are not a bad person because you have debt. Whatever got you in debt in the first place, you can work on. Just know it is important to acknowledge all the debt you have and know the details in black and white. From there you can work on getting out of debt. Here are some tips:
Tips on how to reduce debt:
Negotiate a Lower Rate With Lenders
Consider Transferring Balances – please be aware of the fees involved
Don’t Add Charges- use cash or your debit card only
Do Some Calculations to find how long it will take to pay off – you need to know there is an end at some point based on your payments.
Snowball vs. Avalanche approach to paying off debt
Create a Spending Plan and try to add additional debt payments
Make sure you are saving at the same time – build your cash cushion to fall back on so you don’t rely on debt the next time an emergency happens.
Call to Action—>get out a sheet of paper and write down all your debts. The types of debt-student loan, car loan, credit card, etc. Write down the balance, interest rate and minimum payment for each debt. Take action on as many of the tips we reviewed as possible. Seek help from a professional if necessary.
Thanks for watching my Money Byte, remember to Subscribe to this YouTube channel, follow me on twitter and like my Facebook page. See you next time! This is Britt Castro of FinanciallyWiseWomen.com
Britt Castro, CFP® and Founder of Financially Wise Women
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