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Debt Reduction: Ways to Condense Debt
According to a poll conducted by Federal Reserve in 1995, 92% of U.S. family disposable income was spent on paying arrears, as opposed to 65% in 1975. The average American household has eight credit cards and is up to fifteen thousand dollars in debt. There are various ways to shave numbers off this alarming statistic.
Debt is reportedly a common factor in American society. Types of liability include: mortgage, utilities, doctor visits, car payments, credit cards and insurance; and these can lead to debt very quickly if the chosen cost of living exceeds the received funds. Steering clear of bankruptcy is possible, and preventing future mistakes is even more possible. The following suggestions may contribute to both objectives.
While in debt, most people use this method: limit their credit card use to emergencies only, and buy things with cash. This gives people a chance to experience watching their money disappear before their eyes, and it is likely to motivate them to be wiser with their spending.
The technique most people do not execute is withdrawing from life’s luxuries in order to save and allocate money to paying off outstanding credit card balances and/or similar debts. Life’s luxuries may include housing, transportation, education, assets, and hobbies. Though people need those, they are still able to live off the bare minimum of the comforts of life.
One way to prevent oneself from indulging in terms of housing is if they’re renting, they could either get a roommate or move to a cheaper home. If the home is owned by someone in debt, the option of renting out one or two rooms will net them approximately six thousand a year.
With today’s gas prices, it is cheaper to use public transportation or carpool than to use one’s own car. Dramatically reducing the use of one’s car will save them a considerable amount of money, and they will be able to pay off their debt with it.
If a person has extra time on the weekends or such, it is highly encouraged for them to pursue a part-time job so they can earn some additional money, which may speed up the time it takes to pay off their debt.
Cutting back on guilty pleasures, such as smoking, will generate dramatic results as well. Being considerate when it comes to managing funds will help reduce debt in the future, and may even prevent it.