Are you struggling with debt, whatever the cause? No matter the type of debt you are dealing with, the whole idea behind managing debt arises from the ability of an individual to remain true to some key principles. Not everyone fighting to come out of debt got into it the same way. Therefore, everyone has their unique circumstances; thus, unique solutions must be designed.
Have an Emergency Fund
It always pays to have an emergency fund if you have to get out of your debt or avoid it completely. According to personal finance experts, it is good to have some money that is equivalent to your expenditure for six months to get cushioned against any eventualities. Therefore, you must do whatever is humanly possible to this level, as this adds a solid layer of financial, emotional, and psychological security. This fund will prove extremely helpful when you are hit by a surprise bill such as emergency medical expenses, a loss of employment, or a job loss. In such cases, an emergency fund can be that life-saver you need when drowning in financial problems.
Buy Only What You Can Afford
Without a doubt, credit card debt in American is quickly becoming a serious pandemic. According to the Federal Reserve, the average credit card debt for an American household had $5,700 in 2016, a figure that has since risen to about $6500 a decade later. As a rule of thumb, never resort to a credit card whenever you are caught in a fix. Many people are falling prey to seeing something they cannot afford and then buying it, even when they really don’t need it or can afford it. This pattern, according to experts, is responsible for the growing debt in the country. The best way to deal with such scenarios is by adopting the 50/30/20 rule espoused by Elizabeth Warren, a renowned bankruptcy expert.
Avoid Unnecessary Balance Transfers
A trick some people are using to avoid being caught with due dates is shifting balances between cards (usually by transferring card balances from a high-interest card to one with lower or no interest at all. While this option may appear a viable short-term solution to managing debts, all it does is to shift the goalposts and procrastinate the problem. It may resolve a problem for people with small outstanding balances on their credit cards, but it will prolong the fundamental problem or worsen it on many occasions. If you feel you can pay down your credit debt balance without any further problems, it doesn’t make financial sense to opt for a balance transfer, as this could trigger payment of fees at no benefit.
Control the Number of Credit Cards
If you notice that your credit card debt is out of control, the first step is to begin cutting down the number of credit cards you have. Some people decide to sign up for new other credit cards, a short-lived solution. The best rule is to have a few cards that you can use judiciously. The guideline is always ensuring to use what is available on your credit limit after subtracting what you owe. Keeping this figure as low as possible can help you a great deal.
Contact Elite Document Management Solutions for Help
Through its debt counseling, monitoring, and training programs, Elite DMS is ready to let you know about your credit status and work with your creditors to develop affordable, easy modalities of settling your debts. One of the ways Elite Document Management Solutions can assist you is with debt consolidation. Debt consolidation is a strategy aimed at combining all your debts into one payment so you can only deal with a single lender and avoid multiple interests and penalties due to late or failed payments.
