Ideas for Cutting Debt
- Living in debt is a reality for many Americans.heavy purse image by Julia Britvich from Fotolia.com
In tough economic times, cutting debt is a top priority for many families. At the end of 2009, the average person had 3.5 credit cards and the average household had credit card debt equaling $15,788, according to creditcards.com. A warning sign that you are carrying too much debt is when paying your debt is stopping you from saving for your future or you find yourself shuffling your debt around from one credit card to another. Luckily, there are many ideas for cutting debt. - By making payments on your credit cards that are higher than the minimum required, you will eliminate your debt at a much quicker rate. The higher payments also mean that you will save money on interest. If you were to make a payment that was equal to 5 percent of your balance instead of a 2 percent minimum payment, you could eliminate a $2,000 debt in less than half the time.
- Not all debt is because of credit cards. Many Americans owe a significant amount of money in student loans. There are many government programs set up that will forgive student loan debt in return for your services. For example, a college graduate with a teaching credential can have student loan debt forgiven by working at an under-privileged school. To find a specific loan forgiveness program that applies to your career field, go to FinAid.org.
- There are always things that we spend money on that are not essential. That money can be better spent paying down financial burdens. If you are a pack a day smoker, quitting the habit will not only improve your health but will also save you up to $2,550 a year. By enrolling your child in public school instead of paying for private education, you can save an average of $4,689 per year. By drinking coffee at home instead of spending $4 a day on a premium coffee drink, you can save an additional $1,460 a year.
