If you are dealing with credit card or other debt, you're not alone. The average American household carries about $6,600 in credit card debt.
Fortunately, it is possible to pay off your debt. Even in a time of financial uncertainty, there are ways to address and manage your debt so it works for you. Here are five tips to consider so you can save more, plan for the future, and live life financially well.
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Tip 1: Get an Idea of What You are Currently Spending
To know where you're going, you have to know where you are. Are you spending more than you make? Do you have excess money each month that you could be putting toward your debts? Use our free budgeting calculator to get an idea of how much money you have coming in vs. going out each month.
Tip 2: Take a Look at Your Spending Habits
Once you have a full financial picture of your monthly surplus (or deficit), figure out what your spending habits are and how you might change them to get out of debt. Maybe you're spending too much on subscription services, or you're spending more than you are allotted for groceries each month. Prioritize expenses and identify areas where you may be able to save.
When you have an idea of where you are overspending, see if there are areas where you can cut back. Hold yourself accountable, and check back in on your spending habits. Great! You've made a plan, but are you sticking with it?
Tip 3: Check the Plan
Plan your paychecks and review them periodically to see how much your actual spending compares with your plan. Are you spending habits still in line with your goal? Do you have to change things up a bit? If you do, make adjustments as you need to.
Tip 4: Automate Everything
Set up direct deposits and automate payments so that you don’t miss due dates and get hit with a late fee. Use alerts and overdraft protection to help you avoid mistakes.
Tip 5: Look into a Debt Management Plan
Depending on your situation, there may be options for to get out of debt quickly. If you have high-interest credit cards or other unsecured debts, a debt management plan could be just what you need to get out of debt for good.
A debt management plan works with your creditors to bring your accounts current, lower interest rates, and eliminate fees. This means that more of our payment goes toward reducing your account balances. It can help you pay off debts faster and save money on interest. An added benefit is that once the debt management plan is established, diminishing collection calls and creditor balances help reduce worry and stress about your debt situation.
Get Help Paying off Debt With First Alliance Credit Union
At First Alliance Credit Union we are committed to helping you manage your debt. Our Lending Advisors are here to help you gain a better understanding of your spending habits, and help you create a plan to pay off your credit card debt, such as getting a debt consolidation loan.