Getting out of Debt and Back on Track
According to a recent survey, the number of consumers seeking help from organizations that educate and counsel people on the use of credit has increased by over 25% a year for the past five years. Here are some tips to get out from under those bills:
- Tackle high-rate debt first. If you are carrying a lot of debt, take a careful look at how much you owe and the interest rate you're paying on each loan or credit card. A large part of your monthly payments may be used up just covering interest payments. Make an effort to pay down your highest-rate cards or loans, and if possible, transfer balances from high-rate credit cards to low-rate cards. If you have a high-rate car loan, investigate refinancing your loan.
- Track your expenses better and reorganize. One couple who participated in the recent survey was surprised to find that they were spending more than $300 more than they were bringing in every month. Sometimes the best way to address a serious spending or debt problem is to start from scratch with a simple budget. If you don't know how much you're paying out each month, that's a good sign to get back to basics.
- Cut back on spending. This same couple, by going through every spending category, and noting their expenses for just one month, found ways to cut their personal expenditures $120 per month, entertainment expenses (such as dining out and going to movies) by $350 per month, and charity contributions by $75 per month.
- Talk to a professional credit counselor. If you can't get a firm grasp on cutting your debt, professional credit counselors can help. Wescom has partnered with BALANCE, a financial fitness program that provides information to help you develop a workable budget, get out of debt, improve your credit report, or plan for the future. For more information on the BALANCE program, call us at 1-888-4WESCOM (1-888-493-7266).