Unfortunately, living in America is not free. Life is rather expensive. Last year, the average credit card debt total for the American household was more than $7,000. When we consider only those who actually have debt in the equation, the average debt was more than double the previous total.
College graduates face enormous debt upon graduation as well. The average student receiving a four-year Bachelor’s Degree will graduate with at least $35,000 of student loans. Dealing with numbers this large makes it easier to understand why so many people are just neglecting their financial responsibilities.
Many Americans are only one disaster away from losing everything. Amidst such a widespread financial crisis, there are a few solid rays of hope. Here are some of the most effective ways to grab ahold of tumultuous financial situation and climb out of the caverns of debt.
Mind over matter.
It may sound like verbal fluff, but mind over matter is a solid piece of advice. To get out of debt, a person must set their mind to the process of financial freedom. Debts will not take care of themselves. A strong will to accomplish full repayment of outstanding debts is the number one key factor in achieving relief.
Take a thorough inventory.
Formulate a very precise picture of what exactly is owed. Take an in-depth inventory of each and every debt, large or small, and lay the details out on a spreadsheet. Too many people do not even know what and who they owe.
Without a clear view on exactly what is owed, climbing out of debt will continue to prove a fruitless endeavor. Invest the time and effort to do it right. Then begin the journey towards financial freedom.
Pay more than the minimum.
There are several instances where it would be helpful to pay more than the minimum required payment. Debt consolidation services will consolidate outstanding balances into one secure payment, but the debt is still there.
Pay more than is required each month to speed up the recovery process and save on interest charges. The same goes for credit card balances. Paying the minimum monthly fee will only maintain the debt. It will not provide enough credit to pay down and ultimately eliminate the debt.
Try the snowball method.
Once a regular budget is set into action, try working the snowball method to eliminate debt. First, arrange the debt list from smallest total to largest total. Then, begin paying off the small balances. In the end, this method has been proven more efficient than any other. Throw every possible dime at the debt list, and progress will be much faster than expected.