Tips for Lowering Your Debt and Fixing Your Debt Woes

Stop your debt cycle!

Many Americans are living month to month, just one emergency away from financial disaster. A recent study from the National Bureau of Economic Research states that 51% of Americas would be unable to come up with $2,000 cash in case of an emergency.

In spite of this, the average American family is now carrying between $8,000 and $9,000 in credit card debt alone, but there are many things you can do to improve your own debt picture, or at least cut down a large chunk. Living within your means is sometimes easier said than done, but it’s all about discipline.

Here are a few tips.

1. Calculate your debt: How much do you really owe? Remember to get rid of any unused cards that charge yearly fees. Refinance and negotiate lower interest rates on cards and loans.
2. Be accountable: Record every purchase. Add up expenses like grocery/household, clothing, entertainment, gasoline, rent/mortgage, utility bill, etc. Record these expenses so you can see what it costs to run your household; what is the basic amounts of money you need to pay all your bills?
3. Create a monthly budget and track your spending: Make a list of basic necessary expenses. Pay for your necessities first, then your debts, and if possible, try and save something before you spend on entertainment and recreational activities.

Have a plan. Discipline is the key to getting out of debt. Being debt-free must be your priority. Remember to pay every bill on time. Pay down credit cards with balances close to the maximum first. DO NOT cancel credit card accounts because they can actually hurt your credit score. Remember to check your credit score for free once a year. You can go to www.annualcreditreport.com.