Have you created a financial hole in your life? If so, you are not alone! In fact, as time goes on, the number of households who are in debt continue to rise and rise. The worst part about a financial hole is the fact that it can feel as if it is getting deeper the more you try to climb out.
As impossible as it may seem, getting out of debt is possible. The process can be made a lot simpler if you make some simple changes to your life and follow some important debt busting guidelines.
Check out this helpful article about getting out of debt from US News Money.
Currently, U.S. households owe an astounding $2.3 trillion in non-real estate debt, driving increasing numbers of Americans to turn to experts for help. “It was like an avalanche,” says Carole Carroll, who along with her husband, Donald, saw their credit card debt rise to $88,000 after trying to cope with job loss, family obligations, and other financial burdens. The couple, of Queens, N.Y., developed the dangerous habit of borrowing from one card to cover monthly balances on others, hoping it would give them time to improve their situation. It did not.
Debt can prevent you from buying a home, increase insurance costs, disqualify you when applying for a job, cause marital strife, and spoil future financial growth. In 2006, the Carrolls buckled down to pay off their debt, which they did in less than four years. Here are key steps that experts recommend for getting out of the red permanently:
1. Determine what you owe. “We didn’t actually know how much we owed,” says Donald Carroll, until he and his wife sat down and itemized their obligations. Making a list of all debts, payments, interest rates, and terms, say debt counselors, is a first step to getting out of a financial hole.
2. Consider professional help. The Carrolls contacted GreenPath Debt Solutions, a nonprofit credit counseling agency recommended by the National Foundation for Credit Counseling. The agency helped the couple devise a debt management plan and negotiated lower interest rates for them. When seeking advice, stick with nonprofit members of NFCC or financial planners affiliated with the Financial Planning Association.
3. Drop credit cards. A year before they got married this September, Tracy and Vincent Romano, also from New York City, decided to attack their combined debt of $200,000 from school loans and credit cards. The couple now sticks to cash and debit cards. “I had no self-control,” Tracy Romano says ruefully.
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