Keeping your family’s finances in order is harder than ever, but there are still things that you can do to manage your debt. True, debt is largely unavoidable unless you are already in a financial position that makes it unnecessary, but the vast majority of people are not there. Only 23% of Americans do not have debt, placing the other 77% in the same position as you.
It is never too late to start implementing proven tips on managing debt to improve your situation. Here is the attorney advice on debt management that you will receive, even if you are ready to file for bankruptcy.
Live Below Your Means
The reason why most people are in debt is because they buy things that they cannot already afford on credit. Although things are more expensive than ever, you are still spending money that you do not have. One a significant change in your situation, then you may not be able to earn that money to pay it back when you need to. That’s why you need to live below your means whenever possible.
That means making purchases with money that you already have. To do this, look for cheaper or more affordable options for the things that you buy, and avoid relying on debt to make up the difference. If you can spend less than you make and get by, then you can avoid the more expensive problem of having to get by and pay back debt.
The Debt Snowball
If you have multiple lines of credit or debt open, then tackling all of them at once can be difficult. While you cannot stop paying on your other debts, you can try to focus on one specific one first. Start with the smallest debt that you have and try to pay it off. That means making extra payments toward the principal every month, including paying more than the minimum payment.
Once that debt is paid off, then focus on the next smallest one and pay it off. Keep doing this without picking up new debts, and you can take bigger and bigger chunks out of your overall debt.
Increase Your Income or Reduce Your Debt Load
The hardest truth of managing debt is understanding that buying things on credit means that you bought more than you can afford. The most direct fix is to either increase your income or reduce your debt.
Let’s say that you bought a new car for $50,000 and cannot afford the payments on your current income. You can either increase your income with a second job or a higher-paying job, or you can sell the car and use the funds to pay off as much debt as possible. Both options can be difficult, so avoiding this situation is the best tip for managing debt that you can follow.
Discuss Your Situation With a Bankruptcy Attorney
If you are in a bad financial situation and declaring bankruptcy looks like a good idea, then seek attorney advice and tips on managing debt. The bankruptcy attorneys at Kain + Henehan can help you find ways of fixing your finances, including bankruptcy if necessary. Contact Kain + Henehan by calling (612) 438-8006 or filling out the online form to schedule a consultation.
