Debt. It’s something one study shows around 77% of Americans have in common. While mortgage, student, and auto debt comprise a significant percentage of that debt, credit card debt and other debt significantly factor in as well. According to 2022 Experian data gathered in a second study, those with credit card debt have an average balance of $5,910 and those with personal loan debt have an average balance of $18,255.
This kind of debt can be crippling. Incredibly high interest rates can make you feel as though you are climbing further and further into a hole of debt, even when you’re making your monthly payments consistently. You know you have to pay it all off, but it can be tough to figure out where to even begin to do so. Don’t worry, though—you aren’t alone, and even more importantly, there are practical solutions for getting out of debt once and for all.
Budgeting the Right Way
The first step to getting your debt under control is to create a budget. A budget can help you take control of your spending and create financial security by outlining your current expenses and income. Once you know exactly how much you’re spending each month and how much income you have coming in, you can make changes to your spending habits so you can start saving more and paying off your debt. Creating a budget can also help you plan for larger expenses like a new car or home repairs. With a budget, you’ll be able to see exactly how much money you need to save to make these purchases and how much you need to pay every month toward debt. Adjust your budget as necessary to ensure you stay on track.
Once you’ve created a budget, it’s time to begin paying off debt. The key to paying off your debt quickly is to focus on paying the highest interest debts first while still making minimum payments on all other debts. This way, you’ll be paying the least amount of interest over time and will be able to get rid of your debt faster. You should also look for ways to increase your income so you can pay off your debt faster. Try to pick up a side job or sell some of your old stuff to make extra money so that you can make larger payments toward your highest-interest debt. Doing this will help you pay off your debt faster and save you money in the long run.
If you would like assistance creating your budget, there are several free budgeting tools you can utilize, including smartphone apps and spreadsheets.
Simplify with Debt Consolidation
Even when staying diligent with making your minimum payments and paying the highest-interest debts first, your debt could continue to grow if you have a lot of debt and extremely high interest rates. It can also be easy to miss payments if you owe to several different creditors. For some people who owe debt, consolidating debt is an option they should consider. Debt consolidation is when you roll multiple debts into a single payment. Many debtors choose debt consolidation because they can get a lower interest rate on their single payment, and the one single payment helps them stay more organized when it comes to paying it off.
Consolidating debt is a process that can be difficult for many people to do on their own. That’s why many debtors will reach out to a debt settlement company, or DSC, to simplify the entire process. These DSC’s will work with your creditors to negotiate a settlement on your behalf. The settlement amount will likely be lower than your total debt, but it will be paid off and you will be out of debt from those creditors. It’s important, however, to choose a reputable DSC.
Roadmap to Debt Consolidation
LendingUSA’sFreshstart Lending program assistsin partnering debtors with excellent, reputable DSC’s that have been through a rigorous vetting process. After enrolling in the DSC’s program and making at least 6 monthly payments, the last 3 of which must be consecutive, on-time, and not returned, enrollees will be eligible to apply for a Freshstart Loan to consolidate all remaining enrolled debt into one fixed-rate loan.Entering a program like Freshstart Lending is a great way for people who owe a lot of high-interest debt to various creditors to get on the right pathto paying it off.
Living Debt Free
Paying off your debt can feel like a daunting task, but it doesn’t have to be. With a little planning, organization, and motivation, you can get your debt under control and start living a debt-free life. Start by creating a budget, focusing on the highest interest debt first, and staying organized and motivated throughout the process. Know that debt consolidation is a choice that many debtors make, and programs like Freshstart Lending can help you consolidate all your debts into one easy monthly payment. These steps will help you get back on track and start focusing on your financial goals.