Learn how to control your personal debt and accomplish your financial goals, by making your personal debt work for you.
Are you aware that the average US household credit card debt stands at $15,252? How does it happen? And how can it be fixed? Let me provide you with some preventative ways that can help you avoid falling into debt.
- Don’t bite off more than you can chew! Borrowing money for school or a home seems like a valid reason to take out a large loan, but it’s important to consider how much you are borrowing. Shop around for the best rates, and make sure you know what you can and cannot afford. Fact: the average student loan debt as of March 2014 is $32,986
- Don’t use a credit card to pay for things you consume quickly like meals and vacations. There’s no faster way to fall into debt. Instead, put aside some cash each month for these items so you can pay the bill in full. If there’s something you really want, but it’s expensive, save for it over a period of weeks or months before charging it so that you can pay the balance when it’s due and avoid interest charges. If you charge everything for rewards it is vital that you pay off the balance every month.
- Pay off your highest-rate debts first! The key to getting out of debt efficiently is first to pay down the balances of loans or credit cards that charge the most interest while paying at least the minimum due on all your other debt. Once the high-interest debt is paid down, tackle the next highest, and so on. Another method is to tackle your smallest debts first and work your way up.
- Pay more if you can! If you only pay the minimum due on credit-card bills, you’ll barely cover the interest. That can put you in years of debt, forcing you to pay thousands of more dollars than what you originally owed.
It’s important that you take the necessary measures to ensure a financially secure future for yourself – but you don’t have to go at it alone! Connex Credit Union is here for our members, and can assist you with any financial obstacles that you need to overcome.