We might be saying so long to an old year soon, but many Americans won’t be starting the new year with a clean slate. They face months -- and years -- of credit card bills for purchases made this year and earlier.
According to a recent article, the average credit card debt for households with a balance is nearly $7,000 for a total debt nationwide of 444 Billion.
At a time when many Americans are grappling to afford just the basics, a figure like that can seem insurmountable. In fact, roughly 10% of Americans carrying revolving debt say it will take them more than 10 years to be debt free, and 9% don’t think they’ll ever be free of their debt.
There are options for debt relief. If unsecured debt from credit cards and other sources is out of control, credit counseling and debt management can help.
A debt management plan is a payment plan that you create with the help of a credit counseling organization like CESI. As part of the plan, you and your creditors agree to consolidate your payments into one. Credit counselors typically are able to lower your interest rates so that you’re able to pay more toward the principle with each payment and more quickly pay off your debt.
Regardless of how you handle your debt, there are steps you can take today to start the new year off on the right financial footing.
1. Make changes to your lifestyle: For instance, could you make big cuts to your budget such as nixing all meals out or moving to a less expensive home? Do you have assets that you can sell off to raise money to pay off your debt? If the answer is yes, it’s time to live frugally and get rid of things that you don’t need. It’s always best if you’re able to take care of your debt on your own.
2. Consider Debt Management: If you can afford at least the minimum credit card bill payments, a debt management plan might be right for you. Contact a non-profit credit counselor to discuss your options and see if this is a fit for your situation.
3. Consider a side gig to earn extra money: Paying off your debt by tackling more than the minimum monthly payment will speed up the process, but earning more money can also make a huge difference in your monthly budget. Do you have a skill yo can monetize, whether it’s babysitting, mowing yards, cleaning houses, or becoming a virtual assistant?
4. Use “Found” money to retire debt: Many people receive tax refunds in the new year. Consider this “found” money your ticket to a debt free new year. Perhaps you get a raise each year or a bonus at work. Whatever type of extra money that comes along, it could go a long way toward helping you reach your goal.
Are you ready to get real about your debt? No matter what type of debt you carry, it’s important to know there are options. Achieving a debt free new year may not happen on January 1st, but a future without debt could be yours if you make a solid plan and stick with it no matter what.
The team at CESI is committed to helping you make wise financial decisions and to helping you understand how to get out, and stay out of debt during the holiday season, and all year long. For a free debt analysis, contact us and find out how we can help.
Consumer Education Services, Inc. (CESI) is a non-profit service provider of comprehensive personal financial education and solutions for all life stages and for all of life’s milestones. Our goal is enhanced economic security for everyone we serve.
CESI is NOT A LOAN COMPANY