There are similarities and differences between the debt ceiling and your credit card limit. Both numbers mark your spending cap however historically the debt ceiling has been raised when more credit is needed. As an individual you can call your credit card company for more credit once you've maxed out your card but they have to approve the increase and it won't happen repeatedly.
When you are in debt it doesn't matter if you are the government or an individual. There are two solutions:
1. Increase Income – The government will raise taxes as a way to increase income. As an individual you are going to need to increase your pay. This may mean picking up a side job, taking on more hours at your existing job or asking for a raise.
2. Decrease Spending – The other method to get debt under control is to decrase your monthly expenditures. The government will do this by decreasing funding. As an individual you need to find places where you can cut back on spending. Do you need to have cable? Can you live with a home phone OR a cell phone? Packing your lunch and making your own coffee each morning will save a lot more than you think.
Do not follow the lead of the government in your personal finances. Credit will run out and you will find yourself in a sticky situation.
If you are struggling with debt that you feel is impossible to pay down, it may be time to speak with a Chicago bankruptcy attorney. Download this FREE book, "12 Things You Must Know Before Filing for Bankruptcy" and we will contact you for a FREE 30-minute consultation with David Chang! Contact us today!
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Did You Know?
- 800.000 federal workers were furloughed without pay when the government shut-down.
- The last government shutdown was in 1995 when Bill Clinton was in office.
- The current debt ceiling is $16,669 trillion
The article above appeared in the Suburban Legal Group "Debt, Mortgage, Bankruptcy, Foreclosure Newsletter". Issue – 30 | October 2013