Living Without Debt in an Improving Economy; Three Tips from American Financial Solutions

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If someone is still dealing with debt, now is the time to break free. American Financial Solutions offers tips and advice on how to plan to get rid of debt.

Debt consolidation

American Financial Solutions

Housing prices are beginning to rise, auto sales are improving and even personal savings rates have shown a slight uptick since the end of 2012.

According to the June 15, 2013 statement released by the International Monetary Fund, the U.S. economy is showing some signs of an upswing. While this may be difficult to believe based on the down swing in the stock market caused by concerns over China’s economy and the Federal Reserve’s plan to pull the plug on its economic stimulus activities, it may be true. Housing prices are beginning to rise, auto sales are improving and even personal savings rates have shown a slight uptick since the end of 2012. Below American Financial Solutions lists three tips for ensuring people are ready to take advantage of the economies improvement.

First, continue to work on paying down personal debt. This may be from credit cards, mortgages, auto loans or other sources. Getting out of debt should be a high priority for a stable financial future.

Second, try to find a balance between paying down bills and contributing to a savings account. This money may be used in many situations – to cover expenses in case of job loss, for retirement, to pay cash for emergencies rather than incurring more debt and even for entertainment purposes. The purpose of savings is to provide for a secure future without debt.

Third, avoid obtaining additional loans. As the economy improves, people have a tendency to begin borrowing again. While it is sometimes necessary to borrow money for purchases like houses and cars, be careful to ensure those payments fit comfortably within the household budget. As a general rule of thumb, total debt payments (including mortgage) should be no more than 38 – 41% of a household’s income.

Many people entered this economic crisis with heavy debt burdens. As a result many filed bankruptcy and even lost their homes to foreclosure. Rather than return to feeling overwhelmed and struggling to make ends meet, American Financial Solutions recommends avoiding additional debt and instead focusing on ensuring a secure financial future, where people are prepared for the possibility of another downturn in the economy.

To learn more about managing finances, techniques for saving money or for getting out of debt contact a certified credit counselor today.

American Financial Solutions (AFS) is a non-profit financial education and credit counseling agency. Accredited by the National Foundation for Credit Counseling and the Association of independent Consumer Credit Counseling Agencies, AFS is committed to helping people improve the quality of their lives through financial education and counseling. Check us out on Facebook, Google+,Twitter, Pinterest or LinkedIn

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Becky House

Becky House
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