Posts Tagged ‘reducing debt’

Reducing Debt as a Long Term Aspiration

As of May this year, the average credit card debt stood at $15, 956 per household in the U.S.. This is a sizable sum, and although it has declined steadily in the last year, it is still too much for the typical American family to bear. This is especially true when you consider the additional burden of mortgage repayments, which contribute heavily to an overall financial liability.

Aside from the sheer size of these debt levels, one of the single biggest obstacles to clearing significant liability lies in the general attitude of individuals nationwide. This prevailing philosophy prioritizes short term solutions to what is essentially a longer term problem, and this ultimately ensures that many households often achieve little more than repaying the accrued interest on their debts.

Long Term Debt Solutions: Looking to Clear Rather Than Reduce Debt
With these statistics in mind, it is important to create sustainable methods of repaying your debt and clearing it completely from your credit record. Consider the following:

•    Maximize Your Income Through Sustainable Means: While the need to earn money quickly can be overwhelming when experiencing significant levels of debt, it is important that any additional income streams that you develop can be sustained over time. Whether this is through the acquisition of additional part time work or by marketing a specific skill as an independent contractor, it is as much an exercise in responsibly and effectively utilizing your time as it is anything else, and it can reap significant rewards over a sustained period of time.
•    Establish a Relationship and Viable Repayment Agreement: Once you have boosted your levels of personal income, it is time to use this additional revenue to make significant repayments on your debt. This requires being proactive and engaging in negotiations with your creditors, as you must maintain excellent levels of communication in order to clear your debt. You should also use your improved levels of disposable income to make regular monthly repayments, which are both appealing to your creditors and also manageable over time.
•    Change Your Spending Philosophy: In all honesty, the compiling of high credit card debt is largely due to irresponsible spending, and this is part of a behavioral pattern that is not easily changeable. You must strive hard to change your spending ethos, and embrace a wealth of expenditure cutting consumer options. These include the concept of thrift buying, which prioritizes the purchasing of affordable second hand goods, and also using disposable items where possible within the home. Over time, these practices become second nature and save you considerable money, and contribute towards a long term debt solution.

The Bottom Line
Debt may well be a sizeable issue in the U.S., but for each individual household it is a far more pressing concern. The key to clearing debt lies in adopting a long term approach, rather than prioritizing short term strategies that make no tangible impact on the original liability. As long as you remember this and retain a clear vision of what you aspire to achieve, you can look forward to drastically reducing your debt and welcoming the dawn of financial independence.

Author Bio: This article was written by Lewis Humphries on behalf of Complex Search. Home to a comparison of the best checking account rates on the market, it is a resource that can help you to maximize your income quickly and efficiently.