How to Keep Your Family Out of Debt
What is the average family credit card debt today? When it comes to credit spending, it’s always a risk that you should carefully consider. But, if your family is already in debt and you’re looking for ways to get out, simple tips should help.
The economy is extremely volatile at this stage. The result is that household debt continues to increase. One of the reasons why this is the case is the high inflation rates that have impacted global markets.
If you wish to avoid being summoned to court and using a bail company for defaulting on your payments, consider following this guide. Keep reading to find out more.
1. Make a Plan
What is the average family credit card debt today? A recent survey found that the average American family has incurred credit card debt that amounts to approximately $5000. If you want you and your family to avoid being part of these statistics, it’s crucial for you to have an actionable plan to mitigate such debt risk.
Before you can take action on what steps to take, it’s crucial for you to involve your family. The main thing is that whatever financial changes that need to be made, require everyone to be on the same side. If you don’t know where to start, you can speak to your family law attorney.
In most cases, they have a debt recovery service that they may assist you with. Essentially, you should have a better understanding of your affairs. Drafting steps that include how you’ll go about to tackle your family’s money pinch is essential before you speak to a professional.
2. Prepare a Budget
What is the average family credit card debt today? The fact is that there are many factors that contribute to bad credit for you and your family. The most obvious one is not knowing how to draw up a budget and sticking to it.
The last thing that you want is to learn how to draw up a budget when it’s time for debt negotiation to take place. It’s always best to start now rather than later when you find yourself in a pickle with debt collectors. The first place to start when you’re preparing your budget is to assess your net income.
When you know how much you earn, it’s easier to estimate what you can afford. It simplifies a way to establish money that should go towards your expenses. Your budget should only include the most essential things such as your groceries, transport, utilities, etc.
Here are five tips to help you manage your budget more efficiently.
- Keep track of how much money you spend and on what each month.
- Set realistic financial goals for yourself and family.
- Set spending limits for the upcoming months or until you meet your financial goals.
- Ensure that you adjust your spending as required to stay on course with your prepared budget.
- Do a regular review of your budget.
3. Limit your Credit Debt
What is the average family credit card debt today? If you don’t know the answer to this pressing question, you’re not alone. In this economy, it’s hard to keep up with what your family can or can’t afford.
The thing is whenever you increase the number of credit cards that you take out, you should always remember to avoid seeing a bankruptcy attorney in the near future. Part of ensuring that you avoid incurring excessive debt is to minimize the amount of credit cards that you have. When you go through them, make sure that you discard the ones that you don’t need.
There are various reasons why you should limit your credit spend when you want to get your family out of debt. These are the main reasons that you should consider.
- When you have too many credit cards, it can be difficult to pay back the money back on the stipulated date.
- When you go over your credit utilization, you lower your credit score.
- Too many credit cards make lenders wary of your spending habits.
- If you max all your credit cards, you end up paying higher interest rates as opposed to one credit card.
- The chances of falling further into debt increase for you and your family.
4. Prioritize your Debts
What is the average family credit card debt today? One of the reasons why families fail to keep up with their credit card debt payments is that they don’t know how to prioritize their debts. The truth of the matter is that there are debts that have more consequences compared to others.
For instance, if you fail to pay your mortgage or rent, you’ll likely end up losing your home. In more severe consequences, you might end up facing jail time due to your debt. The last thing that you want is to end up paying additional fees for family bail bonds services providers.
If you don’t know where to start, you should consider asking for professional advice to help you determine which of your debts are high priority and which aren’t. That way it’s easier for you to start paying the minimum on these high-priority debts before they accumulate more interest. When you pay off the debts with the higher interest, you won’t feel the pinch much on the rest of your debts.
5. Increase the Repayment Percentage
What is the average family credit card debt today? Once you’ve structured which of your debts require urgent attention, the next step that you should take is to bump up your repayment plan. Let’s say that initially you were putting forward 10% of your income towards paying off your family’s credit card debt.
You should consider increasing this amount to about 15%. Not only does this help you to p[ay off your debt more quickly, but it also helps to lower the interest that you need to pay. This is a great strategy to help you save a significant amount of money that you need to repay.
6. Negotiate Lower Interest Rates
What is the average family credit card debt today? If you don’t want to drown in more debt, you should understand the need to lower your interest rates or to waive certain fees on your monthly repayments. Sometimes, you just need to make one phone call to get your automotive insurance plan to decrease.
In other cases, being able to negotiate lower interest rates requires a bit more persistence. It always helps when you have a satisfactory payment track record. If you don’t, it’s okay, these are some tips that you can use to make sure that your negotiating is successful.
- Always call in the morning and be polite when you’re enquiring about your request.
- Highlight your length of time as a dedicated customer.
- Make sure that you commit to paying what you owe.
- Be honest about any extenuating circumstances.
- Make special cases to work in your favor.
7. Increase your Income
What is the average family credit card debt today? There’s no denying that the current standard of living has created a need for you and your family to rely on credit card usage. While having a healthy credit record is advisable, it’s essential for you to ensure that you can afford to keep up with all your payments on time.
If you feel as if your credit card debt has reached a point where you might need to apply for cash bail bonds, you need to consider ways to manage it. The first step to take is to find ways to increase your current income. As much as lowering your spending is a priority, so is the need to make more money.
At the end of the day, having extra money coming in should help you manage your monthly payments better and faster. Ways that you can increase your Income include taking on a part-time job or even asking your boss for a raise. If you take on an additional job, you can do so until you’ve managed to reach your debt elimination goals.
Another way to make extra money is by selling off items in your home that you no longer need. You can even do this by listing items online. You can take the extra cash and use it as a down payment on your high-priority debts to significantly reduce them.
8. Cash in Life Insurance
What is the average family credit card debt today? You might find yourself trying to figure out how much more debt you can incur before you have to avoid a civil judgment against you. The thing is, a creditor can sue you when you default on your payments.
This can lead you to being indirectly arrested for debt. Should you wish to avoid using a bondsman after failing to respond to your court summons, consider cashing in your life insurance. This should be a viable strategy to pay off your debt.
When the debt becomes too much for you and you risk using a bail agent, you can pay a larger amount at once. However, this should be considered if your beneficiaries won’t be affected by you cashing in your life insurance. Moreover, this plan will only work if your life insurance has built up cash value.
As a result, it’s not a strategy that you should consider if you have a term life insurance.
If you have beneficiaries, you can still access a portion of your life insurance. You should speak to your service provider to find out if you can use some of its cash value to reduce your debts.
9. Credit Card Balance Transfer
What is the average family credit card debt today? You should think of a credit card balance transfer as an alternative to pay off some of your debt. The idea behind balance transfers is that they offer you zero percent or lower interest rates.
These can save you money, especially when you have extremely high interest rates on your current credit cards. A credit card balance transfer also helps you to consolidate your debt faster. In fact, making extra payments and reducing the amount of time of paying off your debt is possible.
Another advantage of taking this option is that you can get perks in return. Be on the lookout for credit card transfers that offer you low introductory rates, various rewards, and cash back for instance. If you wish to simplify and streamline your finances, you should consider combining your debts into a single credit card.
10. Use a Statute of Limitation for Old Debt
What is the average family credit card debt today? You’d be surprised to find that you’re not legally obligated to pay off your really old debt. When you don’t have the money to pay all of your old debts, you should find out what the rules are regarding any of your outstanding debts.
After a certain period, there are rules that state that all debts, even the ones from your personal injury lawyer shouldn’t be collected. This rule is applied differently with each state. It’s always advisable for you to find out what the rules say.
In summary, having credit cards isn’t a bad idea. The problem starts when you don’t have a strategy to unburden yourself from the weight of your recurring debt. If you know that getting extra income is a challenge, the most practical option is for you to change your spending habits.
When you set realistic financial goals with a detailed plan to reach them, you’ll find yourself able to change your circumstances sooner than you think.
The most important thing is for you to stay committed to the changes that you want to see. A talk with your family on the expenses that should be reduced is also crucial. You want to ensure that you’re running a household with everyone who’s on the same page.
Drowning in debt doesn’t only affect your credit score rating. You can find that your health takes its toll due to the stress associated with your family’s credit card debt. Following the steps that are mentioned in this guide should help you to crawl out of your situation