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Managing debt stress

The Debt Disease

Many people have trouble maintaining their financial lives. Some can’t keep track of where their money goes, while others don’t know how to live within their means. As a result, a staggering number of Americans are burdened by a mass of debt. The loans, the credit cards, the mountain of debt all lead to stress at work and at home. Thankfully, even small changes in financial habits can have a positive impact on what is appropriately called “the debt disease”.

The Debt Disease

Over the years, a whole culture of debt spending has evolved, fueled by the ease of obtaining credit without knowing how to manage it. From a very young age, consumers are offered credit cards, auto loans, student loans, and more. Before long, the debt situation has snowballed out of control.

A National Epidemic

The “debt disease” is one of the worst diseases ever seen, and it has hit hard-working middle-class Americans the hardest. Credit can be a very valuable tool, and for most people, it offers opportunities for things that would otherwise be impossible, such as owning a car or a house. But in taking advantage of the credit opportunities, many consumers have found themselves in over their heads with nowhere to turn for help. Unfortunately, loans and credit card debt are only part of the problem. The true cause of the debt disease is the lack of personal finance education.

The Cure Is Education

First and foremost, escaping the debt disease starts with education. By learning how to get out of debt and manage credit properly, consumers can get their financial lives in order and experience peace of mind, even in the face of unexpected expenses and emergencies. Rather than being burdened by debt, consumers can learn how to use credit to their advantage. 

8 Tips To Escape The Debt Disease

Tip #1: Spend time getting your financial life in order. Schedule time each month to review your numbers. Keep track of your income, expenses, debts, and goals. Invest time in financial education to increase your financial literacy.

Tip #2: Increase your credit score. Make payments on time and keep your balances low relative to your credit limits. In addition, check your credit reports and fix any errors that appear.

Tip #3: Build an emergency fund. Having money set aside to cover unexpected expenses will give you peace of mind and keep your credit score from dipping.

Tip #4: Earn more money. Consider starting a business or investing in something that generates passive income. Look for bonuses at work or aim for extra commissions. 

Tip #5: Teach your children about money. Since education is the most valuable tool in a person’s financial life, pass your knowledge along to your children and help them become financially literate.

Tip #6: Pay off one of your credit cards. Make extra payments on your highest interest account, thereby reducing interest costs. When it’s fully paid off, move on to the next highest.

Tip #7: Contribute more to a retirement account. Some retirement or investment accounts grow tax-free, and some employers offer retirement matching. Take advantage of the accounts available to you and contribute as much as you can.

Tip #8: Buy assets not things. Focus on acquiring assets that give you a return on your investment, such as rental property, a new business, or stocks. Make investments in assets that will increase your net worth.

Find out how 101 Financial’s Workplace Wellness program can help cure the debt disease.