To achieve the goal of debt elimination, break the goal down into achievable steps, be accountable to that goal, and plan rewards for small accomplishments.
SAN MATEO, Calif. (PRWEB) January 22, 2020
Resolving to improve your financial health this year? You’re not alone. More than half of adults who are making resolutions are including one to improve their financial situation, says a new study by Ipsos.
If you fall into that category, there’s a good chance that eliminating debt is at the top of your resolution to-do list, according to Freedom Debt Relief (FDR). The average debt for American households that carry credit card debt is $9,333. That kind of debt, a 2019 FDR survey found, can incur major stress, and have detrimental effects on emotional and physical health.
To achieve the goal of debt elimination, the company advises, consumers should break the goal down into achievable steps, be accountable to that goal, and plan rewards for small accomplishments.
1. Plan spending. A spending plan involves looking at how much money comes in and how much goes out, and then committing to live within your means. Writing down daily spending will help to remain accountable. An individual, or the household, should monitor spending goals and reality each week and month to stay on track.
2. Shun credit cards. Write checks or use automatic bill payment for bills. To avoid going into debt for daily purchases, withdraw enough cash or use a debit card for other expenses. Remain accountable by tracking withdrawals frequently to avoid overdrawing a bank account.
3. Always pay on time. On-time payments constitute the most important component of good credit, and good credit profiles can eventually help credit card holders qualify for lower interest rates on future loans, such as a mortgage. On-time payments also will eliminate late fees and penalty interest rates that make debt mount faster. To succeed, keep bills in one location, check and pay bills weekly, set up online payments, or record due dates on a calendar to stay on track.
4. Save. Work toward saving 10 to 25 percent of all income. Add any amount – even just a few dollars – to savings whenever possible. This can prevent additional debt by providing a cushion for emergencies.
5. Go beyond the minimum. Pay more than the minimum payment on every bill. Consider a consumer with a debt of $11,000 on a credit card with a 17.3% rate. If they make only a minimum payment of 3% every month, it will take more than 20 years to pay off the debt at a total cost of almost $21,000. Even just adding $10 to a payment -- or rounding payments up to the next $10 or $100 increment -- will knock out debt much faster. Take on extra work, sell unneeded possessions, and apply money from a raise, bonus or gift to pay off those credit card bills.
6. Reward yourself for progress – cautiously. Small rewards for achieving debt-elimination milestones can be motivating. But if you spend carelessly and just add more credit card debt, you’ll be sabotaging your goal. Instead, let the budget be your guide for any expense, or plan cost-free activities like a hike, walk, bike ride or indoor movie night.
7. Don’t be afraid to ask for help. If you can’t pay your debt off yourself with careful budgeting and a plan, there are options. Depending on your situation, credit counseling (which sets up a plan to reduce interest rates), a balance transfer or a personal loan could help. People who have faced a real financial hardship can investigate companies that offer debt settlement to help them fully resolve their debt by negotiating with creditors to lower principal balances due.
Freedom Debt Relief
Co-founded by Andrew Housser and Brad Stroh, Freedom Debt Relief part of Freedom Financial Network, LLC, a family of companies providing innovative solutions that empower people to live healthier financial lives. For people struggling with debt, the custom Freedom Debt Relief program offers the chance to significantly reduce and resolve what they owe more quickly than they could on their own. For more information about the company and its services, see http://www.freedomdebtrelief.com/faq.
Headquartered in San Mateo, California, Freedom Debt Relief also operates an office in Tempe, Arizona, and employs more than 2,400. The company has been voted one of the best places to work in both the San Francisco Bay area and the Phoenix area for several years.
Contact: Michael Micheletti, firstname.lastname@example.org or 415-359-6985.