Financial health, and being in debt, is socially embarrassing, but how many Americans realize they are not alone? Eight in ten Americans are in debt, reports CNBC in a 2015 report. Many Americans remain in debt until death, and the average household is actually over $100,000 in debt. If there is a better argument for household debt management, it has yet to be reported. Luckily, household debt is manageable with time, diligence, and a solid plan in place. Necessities and luxuries for home or business are still possible to obtain with some strict discipline on the household finances.
Face the music directly
Getting a handle on the finances means facing them head-on, similar to how any business solution is managed. This is the scariest step in the process because the numbers might be staggering. However, it is necessary to gather all debts to be weighed against all possible avenues of income. This is similar to reviewing the bottom line of a successful business. Enlist the help of a financial advisor,who may be free of charge through the credit unions for members. List financial goals, such as having a specific amount of debt paid off within a year, then create a budget for that goal. Learn to live without some luxuries, such as dining out or other recreation, to meet financial goals. Just as a business needs the books balanced, so too does a home.
Look for cuts
Look for cuts in every part of the budget to help put more money into the debt. Look for reasonably priced homeowner’s insurance rates, re-figure cable bill costs, and look for cuts in the utility bill. Consider how a business chooses what to sell, and how to make a profit. A successful business would never purchase a product, then sell it for less than cost. This is similar to making home purchases on credit or paying for services that aren’t being used. Research every item that takes away from the income with a magnifying glass. Call each company to find out how to reduce payments or cut services. Contribute the extra cash to debt.
Don’t be shy
Talk to companies that hold household debts. Many of them will help a household with smaller payments during financial difficulties for accounts that are in good standing. Choose a debt that will be paid down first, then pay the minimum on all other debts. Use the extra cash toward the chosen debt.Do this until all debts are paid off. This method will help ensure there is enough income for everyday expenses while the debt is whittled away. Calling debt holders and asking about payment options provides a timeline for debt repayments. It is important to stay caught up on every bill, however, as companies are more likely to work with a person who has an account in good standing.
Paying off debt is socially responsible, and with eight in ten Americans doing the same, almost no one is alone in the effort. Figure a budget and stay devoted to the cause. Before long, the debt will be gone.