While the United States is one of the richest countries in the world, debt continues to weigh its citizens down. Credit cards, student loans, mortgages, car loans, personal loans, medical bills: according to our latest survey, most Americans have a combination of these types of debt. And despite their best intentions, people only seem to be digging themselves deeper into the hole each year.
Because debt is such a widespread problem in this nation, we set out to uncover why so many Americans are burdened with debt. According to our recent survey, 26% of people have more than $10,000 in credit card debt. To make things worse, 29% of those surveyed said that if they needed $2,000 for an emergency, they would reach for their credit cards. It’s no wonder why so many people get stuck in this vicious cycle.
The problem often compounds, leading to stress and preventing people from getting ahead financially. It’s a problem that many Americans are aware of and also actively trying to get rid of. In fact, 62% of those surveyed said they would use a $5,000 windfall to pay off credit card debt. However, you don’t have to wait for that to happen to start improving your finances.
Here are 5 things you can do immediately to start getting your debt under control:
1. Stop Using Your Credit Cards
The first step to getting out of debt is to stop accumulating more of it. If you continue to use your credit cards, you’ll only make the problem worse. Instead, switch to paying with cash or a debit card, and you won’t rack up additional debt as you’re trying to pay off what you already owe.
2. Set a Realistic Budget
Next, take stock of all your debts, expenses, and income. Be honest about your needs and evaluate where you can cut costs. Once you’ve prioritized your expenses, create a spending plan that you can stick to. Remember, saving is also an important part of improving your financial health, so make sure to work that into your budget as well. Focus on living within your means so that you won’t have to rely on credit cards.
3. Pool Your Resources
Paying off debt requires a high level of commitment and will require some lifestyle changes. It’s easy to get discouraged at times, but if you remain dedicated to achieving your goal, there’s a high probability that you will succeed. Aside from slashing expenses, try to think of other ways you can free up cash. Perhaps you could sell items around the house and have the profits go toward paying down debt.
4.Get a Side Gig
If you’ve already cut back on your expenses, it may be time to consider earning some extra money too. Flexible side hustles can bring in more cash and help you pay off debt faster. Consider your skills, experience, and available time when looking for ways to boost your income. These days, there are tons of creative ways to supplement your take-home pay.
5. Ask for Help
If you still feel overwhelmed with debt and don’t know where to start, there are experts who could help put you on the right track. There are many ways to get out of debt, and the right solution for some may not be the right solution for you. Your best debt relief option will largely depend on how much you owe, how soon you want to be out of debt, how much you can afford to pay, and other factors. If you need help deciding, read this article about how to get out of credit card debt.