Debt Advice: We Can All Use It
The amount of household debt in American is huge. However by taking the right advice, almost anyone can improve their financial position.
According to the New Yord Federal Reserve Bank, as of the end of Quarter II 2016, there is more than 12.29 trillion dollars of household debt. Of that, $8.84 trillion is housing debt and $2.34 trillion in other debt including student loans, credit card debt and auto loans.
For most of us that means taking a hard look at the amount of money we owe. This can include credit card debt, personal loans, medical bills, student loans, auto loans or mortgage loans.
Talking healthy debt can improve your financial situation. Since very few people can actually afford to buy a home with cash, a mortgage is a great method to buy a home, build equity, and eventually own a home without a mortgage. Student loans are another example of healthy debt, which allow you to get an education and eventually advance your career opportunities.
However, as we all know, using debt to stay afloat may be the only short-term alternative, but will leave you with a a growing debt problem. Here are three sound Debt Advice to help you build your financial position and get debt free.
Sound Debt Advice
Here are some practical debt advice to help you deal with your debt:
Know your Situation: Budget, Net Worth and Goals
In order to improve your overall net worth it is a good idea to take inventory of your debt. Here are some practical ways to keep on top of your finances:
- Create and maintain a budget: Check out bills.com Budget Guide for some some advice. In addition, check out online budget tools. Choose a method that works for you.
- Monitor your credit: Your credit report is important because it contains all of the relevant history that goes into creating your credit score. Take advantage of the free credit score from annualcreditreport.com. If you spot errors, learn how to repair your credit.
- Know Your terms: Make sure that you know your interest rates, monthly payments, and payment terms.This will help you pay off your debt more efficiently and become a better shopper.
- Keep your goals in mind: Keep a list of financial goals. Do you want to get out of debt quickly, or perhaps maintain minimum debt payments and build up your assets? How much money are you saving? Do you have a sufficient emergency fund?
- Recognize a debt problem: Are you struggling to make your monthly payments, or already fallen behind? Are debt collectors knocking on your door? Or perhaps, you are paying a high intererst rate on your credit cards and can more efficiently pay off your debt and save money.
The Strategies: Know Your Debt Relief Options
After following the first piece of debt advice, you are now better fit to find a debt relief option that fits your situation. Remember, there is no magical formula to get out of debt, and no one size fits all program. If you are suffering from a financial hardship, then it will take hard work to get out of debt.
If you have a solid cash-flow, the easiest piece of advice is to follow your budget, save money, and apply money regularly to their debt. Instead of making minimum payments on your credit cards, you can quickly get out of debt and start building your savings.
However, if you are struggling with debt, then you will need to find the best program, matching your credit, income, assets, and goals.
Bills.com has an innovative tool, the Debt Navigator, that offers you personalized free debt advice. After a short series of questions and a soft pull on your credit, the Debt Navigator offers you various debt relief plans that fit your situation.
Get Professional Debt Advice
Our last piece of debt advice is very simple. Seek out professional debt advice.
If you are looking for a mortgage, loan or credit, then make sure that you deal with professionals, who can explain the product and match the debt with your needs.
If you are looking for a debt relief solution, then seek out professional, reputable companies. Avoid paying upfront fees and ask for a free consultation. By comparing your options, you can take the debt advice one step further, and get debt free.