The following is a guest post by Lisa @ Frugal Living
Are you in debt? Depending on your definition of “debt,” you may or may not be in the majority of the population. At get paid each month – like a mortgage, or a car payment. Some consider “being in debt” as having normal everyday payments that are paid each month. Others, who are thousands of dollars in debt and accumulating late fees, know they are in debt because they are in over their heads and struggling to get out. For many, unfortunately, getting out of debt is no easy task – but a slow and steady effort is often the best and only course of action.
The Magic Diet Pill
Remember when diet pills were all the rage? Well, “were” might not be the best term, as that industry will perhaps always be present. And while it is likely impossible to quantify, we could all agree that the consumers who take diet pills could be great in number, at the very least.
We can quantify debt, however. In statistics taken from EconomyWatch (via Moneyzine and Hoffman Brinker), consumer debt in the United States amounted to $2.4 trillion in 2010 – $7,800 per person. 1 in 10 consumers has more than 10 credit cards. 1 in 50 households have more than $20,000 in credit card debt. The numbers go on and on, such as the 1 in 160 who have filed for bankruptcy across the country.
In the parallels between remedies – diet pills or wondrous ways out of debt – effectiveness may be questioned. Sure, diet pills may work for some people in certain situations, just as bankruptcy and debt counseling may be right for others. What about everyone else? What if those “easy” ways are not right for you?
Slow and Steady Wins the Race
What is the solution? If it isn’t bankruptcy or debt counseling, then what is it – another credit card with a 0% APR for 12 months (more debt), a personal loan (more debt), or a second job?
Well, maybe. The truth is that each household is different. While we can attach a number to account for the average household debt ($15,799, by the way, according to the Federal Reserve’s July 2011 report on consumer credit), there is no single best way to proceed.
Certainly, maybe a lower interest credit card might help you consolidate your outstanding debt, if only to rework all of your minimum payments into an equal amount – but with a better APR. Maybe you could consider doing some freelance work or babysit in the neighborhood to enhance your income long-term solution, although definitely not a quick-fix, in terms of generating additional (immediate) income.
Once again, each household is different. Your current debt is of an organically different makeup than someone else. Thus, the correct decision can only be made by you or a qualified professional in relationship to these factors. Knowing how to create a budget and sticking to it are important skills, for children and adults of all ages.
In the end, a sound plan will navigate you through and hopefully out of debt permanently. Most likely, it won’t be quick and/or easy. You may have to budget carefully as you attack a credit card one by one. Aligning yourself with others who value the “less is more” philosophy, and staying informed by interacting with knowledgeable individuals on personal finance blogs like Yakezie or Budgeting in the Fun Stuff can help support you on your journey to being debt-free.
Saving money along the way, you’ll be able to attack your debt with perseverance. In what ways have you made changes to your budget or life in order to pay off debt? Share them with us!
Article publié pour la première fois le 02/11/2011