Living a debt-free life is a goal of many Florida residents and others around the country. However, millions of the nation’s households have credit card debt. With an average debt per household of $8,448 and an average interest rate of 14 percent, a family may spend over $1,000 on interest. Experts recommend several steps to take to become debt free.
A written budget is a key component to verify actual income and expenses. It is difficult to completely understand the situation without this document. Financial counselors also suggest identifying a target date when debts will be completely paid. Whatever method is chosen to get there, having a specific date to work toward is vital. When success is achieved throughout the process, plan to celebrate.
Experts also warn of common behaviors that keep people mired in debt. One typical pitfall for consumers is not thoroughly understanding their budget and how to keep it balanced. It is critical to know where all one’s money is going to create a plan to get out of debt. Another problem is that people avoid making the tough decisions to reduce costs or get a second job. Not addressing the issues in a timely manner can only exacerbate the situation.
Many consumers do not routinely use available technology that can help create good saving or spending habits. For example, both credit card payments and contributions to retirement savings accounts can be automated. Others take advantage of credit card points programs and find themselves deeper in debt. Finally, while debt consolidation loans or balance transfers can help some get out of debt faster, the problem can worsen if spending issues haven’t been properly addressed.
When credit card debt seems out of control, the situation may feel overwhelming. A Florida bankruptcy lawyer can help someone evaluate a situation and understand all possible courses of action. A knowledgeable attorney will recommend the best option to help a client regain financial stability.
Source: Forbes, “Mistakes keeping you in credit card debt“, Nick Clements, July 12, 2017