Getting debt elimination advice is something that most of us resent when we badly need it in fact. Did you know that an American household has an average of $137,063 in debt? This is according to the Federal Reserve’s statistics in November 2017. Furthermore, the U.S. Census Bureau found out that the median household income was $59,039 during the same year. This shows that a huge percentage of Americans are living beyond their means. So, if you think that you are alone in your debt battle, know that a lot of others are facing the same dilemma. Now, is there really a way to get out of debt? Absolutely! It is just a matter of getting the right information and following proven debt advice.
Here, I have outlined the top 10 tips for debt elimination so you can start 2019 fresh.
Debt Elimination Tip #1: Create A Budget and Stick to It
This is the most effective way to manage your debt. Have an accurate account of your daily spending so you know where your money goes. In my previous post about getting out of debt, I talked about the 50/30/20 rule of budgeting. You may want to read it and implement it in your life too.
Debt Elimination Tip #2: Be Realistic with your Financial Goals
Getting out of debt does not happen overnight. This is a truth that you must accept along with the fact that it can be a long process. However, your commitment to getting rid of debt entirely will pay off later on. It usually takes 3-4 years to wipe your debt completely and start building a solid financial foundation.
Debt Elimination Tip #3: Don’t Buy Something Unless You Can Pay For It In Cash
I’d like to say that this advice applies to everything except when buying a home. Paying something out of your pocket is a good way to avoid impulse purchases.
Debt Elimination Tip #4: Pay More Than The Minimum Amount Due to your Credit Card
This is actually a common mistake that many of us commit. We think that paying only the minimum amount due is a smart and helpful option. What we don’t realize is that minimum repayments lock us to our credit cards for years. So, make sure you pay on time and more than the minimum amount due.
Debt Elimination Tip #5: Always Monitor Your Credit Cards for Alterations in Fees and Rates
Statements of accounts exist for a reason. A lot of people just scan it and focus on the due date, the total charges, and the minimum amount due. I’m telling you, it pays to go through every transaction on your SOA. Plus, make sure you always check the rates and fees because you might miss notifications about changes in those.
Debt Elimination Tip #6: Work with your Lender If You’re Having Financial Difficulties In Paying your Mortgage or Car Loan
Talk to your lender if you know in advance that your present financial situation would make it difficult for you to pay your mortgage or car loan. They may offer you solutions to help you get through your tough times. It is just a matter of having an open communication and being transparent with your circumstances.
Debt Elimination Tip #7: Don’t Borrow More to Pay for your Existing Debt
This is another mistake that a lot of people make. They acquire new debt to pay for their existing debt. If the amount you’re borrowing from another lender has higher rates and fees, then you are only making matters worse. I suggest you work on paying your current debt with the resources you have.
Debt Elimination Tip #8: Shift your Debts to A Cheaper Credit Card
Other credit card companies offer cheaper rates when you transfer your debt from another company to theirs. You may want to check this option. You’ll be surprised to know that you can even save money when you do this.
Debt Elimination Tip #9: Think of Another Stream of Income
This is one important debt advice that not all are ready for. Personally, I always advise my clients to look for other earning opportunities. You don’t have to apply for another job to earn more. Think about freelancing and how others are making money out of their skills. Is there a skill you can offer? You can write articles, do graphic design, offer bookkeeping services, etc. You can even make the most out of your cooking or baking skills and start selling goodies online. Your imagination is your limit.
Debt Elimination Tip #10: Get Free Financial Advice
Let’s face it. We often think that we can do things alone when we obviously need help. The same goes with getting out of debt. Getting some financial advice doesn’t mean that you can’t solve problems on your own. In fact, acknowledging your limitations is a good thing. A Financial Advisor will help you look into your current financial situation honestly. Then you both can talk about solutions and how you can do it step-by-step until you’re debt-free.
Need Personalized Debt Elimination Advice?
Book your complimentary 1-on-1 coaching session today and let us talk about how you can get out of debt. Besides, 2019 is just around the corner. It will definitely feel good to do something about your present financial situation. Talk to you soon!