The Savvy Girl’s Guide to Digging Out of Debt

Bella Breakdown

Big or small, debt can be a heavy burden. Here are some ways to dig out of debt and tips to help you stay afloat and improve your finances, your credit and your peace of mind.

In 2008, during the financial crisis, many families were hit very hard. Some people were able to use credit cards to pay for things because they had such good credit.

Many did this just to stay afloat after losing their jobs. People used to them to buy groceries, pay medical insurance, and to pay their mortgage. However, eventually the credit runs out.

The average American has $16,000 in credit card debt. However, experts say that you should not end up in debt just to pay for your living expenses.

Companies that specialize in debt management are helping people try to dig their way out of the debt they have gotten themselves into. The companies help people do a financial analysis on what type of debt they are dealing with and help them to figure out what kind of payments they can make, what they are able to pay for, and to possibly negotiate with credit card companies to reduce the interest rate on their payments, as well as to set up a payment plan.

Reducing the APR (average percentage rate) can shave thousands off of your debt and reduce the number of years you will be paying off your debt. However, it takes more than a company to help you get out of debt.

You need to do the work yourself – to make the changes and stay on that path of good decision-making. Another tip they give is to routinely check your credit score and to make sure that there are no mistakes made in your report. At the very least, you need to make your minimum payment and make the payments on time.

In addition to being aware of your financial status, other advice the companies give you is to stop using credit cards, pay off credit cards with the highest interest rate first, and only consider bankruptcy as a last resort.