Statistics show that the average American has more debt now than they ever have. As people's debt loads keep rising, it will become harder and harder for them to get out of debt, which is an important goal for anyone who wants to retire safely, buy a house or car, or be financially stable. Here are some easy things you can do to live the debt-free life you've always wanted.
- Consolidate your debts. This is the most important tip we can give you. Most or all people who have trouble with debt have so much debt that they can't pay it off right away. How to act? Consolidate your debts. Debt consolidation is the process of combining several smaller debts into a single payment. Then, a reasonable monthly payment can be used to pay off this amount. Your debt counsellor can find a company that can help you get a loan to pay off all your debts at once.
- Talk to a financial counsellor. A financial counsellor is someone who has been trained to help people like you who are having trouble with debt. They can help you come up with a step-by-step plan for getting better and also give you emotional support as you do so. A debt counsellor from a government agency or a non-profit organisation can often be seen for free.
- Choose which debts to pay off wisely. Debtors who are too eager to get out of debt quickly often skip this step. They start to work hard and pay off their first few debts in a random way. Later, they often lose interest and stop paying off their debts, which puts them right back where they started. Instead, choose the right debts to pay off first with the help of a financial counsellor. Choose the debts that you can pay off easily, that are adding up quickly, or that are hurting your credit the most.
- Cut up your credit cards. This tip may seem simple, but if you have a lot of debt, the first step to getting out of it is to stop getting more debt. You can only do this if you don't have any way to do it. You could also give a close friend or family member one of your credit cards in case of an emergency and destroy the rest of your credit cards.
Whether you owe a little or a lot, are in your 20s or getting close to retirement, or are just getting by or making six figures, debt reduction and consolidation will help you a lot. Think about how freeing it will feel to be able to buy that house or car, retire well, or send your child or son to college without worrying about your debt getting worse and worse.
