$8,000. That’s the amount the average American household has in credit card debt.
Statistics show that nearly half of us are spending more than we earn. Which means one thing: debt…and the worry, stress, and anxiety that comes with it.
In today’s world, debt has become the norm. The average college student graduates with $20,000 of debt. The average cardholder has 7 credit cards, and only 40 percent of active credit accounts are paid off monthly.
Money is a “personal issue” for many of us, but chances are, if you’re reading this article, you’re looking for a way out of the bottomless pit of debt. Counselors and life coaches have found that nearly 3 out of 4 Americans name money as the number one stressor in their life. Sound familiar? If debt has you stuck between a rock and a hard place, try these practical tips:
1.Curb your spending habits.
Just because you want something…a Louis Vuitton handbag, the latest iPhone, a Caribbean cruise…doesn’t necessarily mean you need it. Avoid window shopping and buying on a whim.
2. Wait a month before making big purchases.
Do research to look for the best deal. If you don’t have the money in your bank account to buy something, don’t buy it.
3. Record your expenses.
While it sounds drastic, there’s no better way to see where your money is actually going than to write it out. Keep an Excel document for one month and track what you spend your money on. You may be amazed at how much cash you’re burning.
4. Do the math.
Little expenses add up. Which means that it’s easy to spend, but also easy to save. A $4.50 latte a day amounts to $135 a month. A $6.99 lunch a day adds up to over $200 a month. Evaluate your spending habits and decides what’s a “must” and what’s not essential.
5. Make a budget.
Spending more than you earn is a sure formula for stress and anxiety. Develop a budget that divides your monthly income wisely. Cover the bases of housing, utilities, gas, insurance, and groceries first before you spend money on eating out or entertainment.
6. Pay your bills on time.
Late payments can be cost-exorbitant and can lower your credit score. Plan ahead, and pay your bills before you make other purchases.
7. Pay down your debt.
Even if you don’t have a lot of extra cash, make regular payments on your debt. Pay more than the minimum, if possible…every little bit adds up. Pay off high interest debts first to avoid extra charges.
8. Learn to live within your means.
Simplify your life and consider what you can say “no” to in order to manage your money more wisely. Shop discount. Eat at home. Carpool. Brew your own coffee. Look for sales. Just because you can spend money on something doesn’t mean you have to.
Despite what advertisements say, stuff won’t make you happy. Debt can easily sap your joy and consume your energy. Living simply can be freeing, rewarding, fun, and definitely less stressful. So cut your credit cards up if you have to, or stick them in a Ziploc bag in the freezer for emergencies.
Remember, your goal in life isn’t to keep up with the Jones’s. If you do, you’ll also be keeping up with their debt.
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