Tips for Debt Management
Are you dealing with debt? You’re not alone. Debt.org states, “Total U.S. consumer debt in 2017 was $12.84 trillion or about $200 billion more than the record $12.68 trillion we owed in October of 2008.” Whether you’re dealing with debt from student loans, credit cards, or other circumstances, debt can impact various aspects of your life and finances. While no one likes to discuss their debt, it is important to acknowledge it in order to develop a plan to reduce it. Here are several tips to help you tackle your debt.
Develop a Wholistic Picture
The best place to start is to evaluate your current financial state. Knowing how much you owe, to who, interest rate, and monthly payment amounts can help you have a better understanding of your debt as well as finances as a whole. You can also start by looking over your banking statements over the past three months to see where your money was spent. Did it stick to your budget? How can you improve going forward?
Set Realistic Goals
Getting out of debt is a process that, unfortunately, cannot happen overnight. Having small goals throughout the repayment process can help you remain positive and motivated to stay on track. Your goals can change as your circumstances change, for instance getting a raise and wanting to reduce your debt faster. All that matters is you set goals that you are able to reach through disciplined steps that you are able to stick with for a long period of time.
Don’t Forget to Live Life
Just because you are in debt does not mean that you should miss out on all fun things in life. Sometimes people are so driven to pay off their debt that they miss out on life’s events, like seeing friends or go on vacation. It is important to remain disciplined and make sacrifices throughout the repayment process however, this does not mean you should dedicate your entire life to repaying your debt.
While many Americans tend to sweep debt under the rug and ignore it, we need to remove the stigma behind debt and begin having open conversations to help us be more aware and proactive towards reducing the amount we owe. Developing a holistic plan, setting goals, and living your life can make the repayment process easier for you and your family.
The information provided here is for general information only and should not be considered an individualized recommendation or personalized investment advice.