Debt is becoming more commonplace in American society. In fact, a new study has found that the average American is nearly $28,000 in debt, and that figure does not include mortgages. However, experts have come up with five steps that will help to make unmanageable debt manageable for consumers in California as well as in the rest of the country.
Perhaps the easiest step a person can take to reduce his or her debt is to simply keep track of spending in order to recognize the problem and get the excess spending under control. Then, the person should confront his or her debts by figuring out their exact amounts and organizing a list. Naturally, the individual should attempt to avoid accruing any more debt.
Next, the person in debt can begin to conduct what is called a "debt snowball" process. In this process, the individual pays the minimum payment on all debts -- except for the debt the person would like to finish paying first -- in order to slowly begin paying all debts off. Finally, once debts are being paid off and the individual is gaining better control over the finances, the person should establish an emergency fund for unexpected expenses.
While these steps to debt relief may take a long time, once a person is free of debt, all of the hard work will have been worth it. Even though these steps give good advice, there are other ways for one to make unmanageable debt manageable. By consulting with a California professional, a person in debt can gain valuable information on different debt relief techniques in order to choose which one that person feels is best.
Source: Fox Business, 5 Essential Steps to Escaping Your Debt, Holly Johnson, March 20, 2014