Five Ways to Reduce Your Debt

Debt – The state of owing, as defined by Merriam Webster Dictionary. 

As Americans, our debt which includes but not limited to medical bills, student loans, credit card loans and mortgages, often times exceeds our Household Income. We buy lavishes of gold and sliver to be compared to the Jones’, but know that financial freedom is obtainable.

1. Create a realistic budget. Make an accurate list of your necessities, which includes housing, utilities, bills and other expenses. Next, prioritize your monthly bills to determine what’s essential and what you can do without. Lastly, seriously consider how you can reduce the money you spend monthly on gas, food, fun and leisure (plays, theatre, bars, alcohol, vacations, etc.)

2. Lower your credit card rate. Contact your credit card companies about lowering your interest rates. Through experience, it’s best to pay off credit cards with the highest interest rates of the cards your posses.

3. Create a rainy day fund. Expect the unexpected! This means that you’re going to have a flat tire, transmission problems, utility problems, medical emergencies, family problems and other financial emergencies. So, in other words SAVE, SAVE, SAVE. Using the money you’ve put into your emergency fund you will be reluctant to use your credit cards for fixing your car problems.

4. Pay more than the minimum. As you’ve heard before, paying the minimum ($27-$35) monthly credit card payment is not helpful in getting you out of debt.

5. Know your credit score.Knowing your FICO scores helps you to stay financially conscious. Don’t be afraid to contact one of the three credit bureaus to see whether you’re categorized as having poor, fair, good or great credit.