5 Ways to Overcome Debt
Millions of Americans — even those that earn big paychecks — struggle with debt.
There's no easy solution, but there are a few ways to help break free from the burdensome
debt. Hopefully these 5 financial tips can help get you started.
- Be Accountable.
Take charge of your finances and know your numbers. Make a list of what you owe
this month and compare it to your paycheck. Sometimes seeing it on paper makes it
real and easier to face.
- Review Your Paycheck.
You get paid a gross income. However, by the time taxes, insurance, and retirement
contributions are deducted, your “take-home” pay is less — sometimes much less.
Be sure your spending budget is based upon this net income and not the gross.
Otherwise, you may be adding to your debt without knowing it.
- Log Your Spending.
What you spend each month is different from what you owe. In fact, it’s in addition
to what you owe. Keep track of the money you spend on things like lunches, coffee,
haircuts, and happy hours. You might be surprised how quickly it all adds up.
- Make The Cut.
Let’s start with groceries, for example. Did you know that the average family of
four spends about $450 a month on food? That’s a significant amount of money! What
a great place to start looking for ways to save. Food clubs can help, especially
when you buy in bulk. And rather than going out, try packing just two lunches a
week. A little quick math will tell you just how much you’ll save in a week, a month,
or even a year.
- Avoid Banking Fees.
Simply keep an eye on your account balance so you can avoid overdraft
fees. Most banks
offer online banking that make monitoring your account a breeze. All you need is
access to the Internet.
So start gathering your lists, your account balance, your temptations, and your credit
report and take ownership. You can also go to other helpful financial tip sites
With all this information, you should be able to identify pitfalls and figure out
how long it will take to overcome your debt. Once all the numbers are committed
to paper or computer screen, you can develop a month-by-month plan that gives you
the supreme satisfaction of crossing off your debt.