Overwhelmed by Debt
It is estimated that 8 out of 10 Americans are in debt. That is 80% of all Americans who are in debt, and most of them are carrying debt into retirement. Debt is a huge burden to many people, and the circumstances that have gotten them into financial trouble vary from medical bills to credit cards to student loans to bad investments to reduced income to divorce. If you are overwhelmed by debt, no matter what led to your financial troubles, there are ways to avoid being overwhelmed by debt in the future.
- Learn to budget. If you have a large amount of debt that is a result of too many expenses and charges, it is time to learn to prioritize your debts and necessary living expenses. Your bills that require essential payment (e.g. mortgage, utilities, child support) need to be at the top of your priority list in your budget. Once you are on a good schedule for paying those, then it is time to add in debts that may be less important (e.g. department store credit cards, a loan from a family member). Once you have a budget in place, stick to it. Getting out of debt through budgeting takes time and perseverance, but if you stick to it you will be successful.
- Shred your credit cards. If you are already overwhelmed by debt, there is absolutely no reason why you should incur any more debt. Other than food, gas, and the absolute necessities in clothing, no other money should be spent on anything other than paying off the debt you already have. By shredding your credit cards, you will omit the opportunity to acquire more debt.
- Contact your creditors. Creditors want to be paid, and they are often easier to work with than many people assume. By contacting them and letting them know of your financial situation, they are often quite willing to work with you. Many times, a payment plan can be agreed upon, or they may let you skip a few payments now and tack them on at the end of a loan term. Know this: creditors are more willing to work with those who are willing than those who ignore them.
- Save. Even just a little. Emergencies will arise no matter how careful you are – you will get a flat tire, your child will break a bone, you will need dental work, or something else will come up. Even if you can only put away $20 a month in an envelope at home, that is $20 bucks you will have when you need it. By saving even a small amount each month, it will add up, and over time that amount will be a substantial savings.
At Gingold & Gingold, LLC, we want to help you manage your current debt and take the steps to avoid future debt. Contact us today to learn more.