You're paying more each month for groceries, utilities, and gasoline, but those bills aren't the only ones you need to fit into your packed monthly budget. Arriving at the end of the month with nothing in your checking account and big credit card bills staring you in the face might seem like an insurmountable challenge, but living with debt doesn't mean going without the necessities.
Avoid Bad Advice and Bad Debt
Financial experts like to talk about "good" debt and "bad" debt, but when you can't pay your bills, all debt is bad debt. A car loan with on-time payments looks terrific on a credit report. However, does that "good" debt do anything for your credit score if it's joined by a half-dozen credit accounts that are over-the-limit and riddled with late payments?
Until you can get to the end of the month with a few dollars remaining in your pocket, don't assume that any debt is good. Take necessary steps to bring your monthly payments down to a manageable level. You might need to think about consolidating debt, speaking to card companies about interest rate reductions, or refinancing your mortgage.
Find What Works for You
It's hard to pin down the average amount of monthly bills that an American pays on debts like credit cards, loans, and mortgages. Lifestyles differ, and so do income levels. The best debt control strategy for you is probably going to be a little different from your neighbor's plan.
Living with debt means paying attention to those bills each month, so it's time to sit down and get friendly with the simple equations you learned in high school math. You can't control your debt if you don't know what's going on with it each month.
Go Beyond Credit Cards
High interest rates make it difficult to get rid of credit card balances, but those insidious accounts aren't the only bills staring you in the face each month. Consider that you might have some redundancies in your utilities and entertainment. Do you have a land line and a cell phone? Cancel one and use the money you save for paying down credit card bills.
Depending on your income, you may also qualify for assistance, which may allow you to move money that was meant for high utility costs to debt payments on credit cards or loans. There are an extraordinary number of government benefits available to help with monthly costs like energy bills.
Taking Drastic Steps
Have your bills reached a point where you're starting to cut back on medical care and food to pay for loans and credit cards? Are you losing sleep and getting sick more often because of the stress? If living with debt has started to impact your health, you might need to think about some significant life changes.
Filing for bankruptcy is a last resort for debt problems, and it's essential to investigate such options before you need to file. Bankruptcy isn't something you can rush toward at the last minute when foreclosure is on the line, and debt collectors are threatening legal action and liens.
If you're already deep in debt and are just hanging on each month with minimum payments, you need to confront your bills. After the Great Recession, credit card debt tanked because banks wrote off tons of accounts, but today, credit card debt in the United States is rising. Are you one of the millions of people adding to your debt load by spending more on credit cards each month? Take control of your bills today with responsible spending habits and effective debt payment tactics.
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DISCLAIMER: All information on this website are provided for informational purposes only and are not intended to be construed as legal advice. Suburban Legal Group PC shall not be liable for any errors or inaccuracies contained herein, or any actions taken in reliance thereon.