Considering that the average American household carries an average debt of just over $137,000, financial fitness may seem out of reach to many. However, a few strategic financial moves and even those households tipping the debt scales to the maximum can benefit from a personalized financial fitness plan. Discover ways to tip the debt scales in your favor.
Start A Small Savings Plan
This may seem counterintuitive as savings accounts very rarely offer clients interest rates that can compete with those on their credit. Logic would state that any additional funds be put towards the debt in order to get it down a little quicker. With this strategy, however, the minute a financial hurdle comes along, further debt will seem like the only way out. At least with some funds tucked away in savings, these hurdles can be overcome fully or partially without relying on debt.
Reduce the Monthly Debt Burden
It takes a fair amount of bookkeeping to keep up with a host of different payments. Not only is it overwhelming, but some payments can easily be overlooked or forgotten. One way to get these payments under control is to try and get rid of the smallest debts faster in order to reduce the number of installments. Another way is to consolidate these loans with a personal loan. Certain loans look at more than credit scores to determine the loan amounts and viability and can use education and experience. This opens doors to those who have the credentials and work well for those who have a number of student loans to pay off.
A Strict Budget
Financial guru Dave Ramsey recommends that students of his programs live like no one else today so they can live like no one else when they’re older. This means cutting away all the fat and living on the lean side. Many of his participants take on additional jobs to try and beat their budget, which is at the heart of their financial fitness journey. A strict budget also means that the opportunity to spend on wasteful items is reduced and the chances of regressing into debt are minimized.
The debt cycle is not an easy one to get out of, especially where there is need and bills are mounting up. A little bit of frugal living and setting aside funds go a long way in getting out of debt. Experiencing financial fitness is easier when debt is out of the way.