As a result of the economy, all subjects related to money or personal finance are currently the hot topic of discussion. There are websites, blogs, books and other areas devoted to covering the latest news in the world of personal finance.
In fact when it comes to personal finance, there are few areas that are truly “personal” anymore. Lenders, employers, landlords and many others can review your credit report to determine your overall “worthiness” and how you handle your money can have a lasting effect on those around you as well.
For this reason it is important to consider how your financial decisions will impact not only your life but also the lives of those closest to you.
Debt is one of the leading problems facing families today. It is also one of the areas of personal finance that can have negative consequences for everyone in your household. Here are a few reasons why getting out of debt should a top priority for every American family.
Reduce debt to reduce stress.
There is no denying that people struggling with debt have more stress (or different stress) than their peers who are not facing similar circumstances. The constant worrying over finances inevitably crosses over to other areas of your life. Less patience with your spouse or children in addition to not being able to enjoy the day-to-day events in your life are common for people facing money problems.
Reducing your debt can eliminate much of the stress in your life allowing you to enjoy your family and life in general.
Eliminate debt to achieve other financial goals.
Most of us understand the importance of saving money for future expenses. Retirement, emergency funds, education expenses and many other expected or unexpected expenses should be planned for in advance. Making regular contributions to your savings account is the only way to prepare for these costs.
Without saving money for your future you are more likely to remain stuck in the cycle of debt. Once you have eliminated your debt you are in a better position to provide for yourself and your loved ones.
Regain control of your life.
People facing large levels of debt are basically at the mercy of their lenders. As you can see from the previous example you cannot prepare for the future if you are still paying for the past. With the current changes taking place in the credit card industry, people who have large balances on their cards are facing an uncertain future.
Interest rates are on the rise, rewards programs have been scaled back and knowing what you may have to pay from month-to-month is becoming a guessing game. This will make it difficult to budget other household bills which may result in months where you do not have enough money to cover expenses.
It has become an accepted part of our society to be in debt. Unfortunately this attitude has lead to many people living well beyond their means which has contributed to state of our economy. The good news is that it is never too late to turn things around. Getting out of debt will take considerably more work and sacrifice than getting into debt, however the rewards are well worth the effort.
To get started you must determine where you stand currently (who and how much you owe) which will help you decide which strategy will work for your situation. For those who are able to afford repayment in full, the snowball method has become a very popular method of paying off debt. Other families may discover they need help getting back on their feet.
Debt consolidation or negotiation are options that may prevent the need to file for bankruptcy. For the sake of your financial future and the happiness and security of your family, take the first step to financial freedom and get started today.
The author of this guest post, Trisha Wagner, is a freelance writer for DepositAccounts.com, where you can compare rates of checking accounts from dozens of banks in one place. Trisha writes regularly on the topics of personal finance and savings accounts.