How to Control Debt when You Don’t Make Enough Money

Consumer debt is out of control in America. Spending is definitely part of the problem but wages that haven’t budged in nearly a decade also contribute.

There are some ways you can control debt, even beat it. You first need to understand different types of debt, how to prioritize debt payoff and then how to keep from becoming a debt statistic! 

Understand that Not all Debt is Bad

Think of debt as a tool, like a hammer. If you know how to use it, you can build something marvelous and useful. If you use it incorrectly, you can smash things up pretty badly.

Controlling Debt Starts with Your Spending

If your debt is getting out of control, you might need to cut back spending for a few months until you pay down the burden but that doesn’t mean you must live like a miser for the rest of your life. 

Focus on those High-Rate Debts First

There are two strategies to pay off debt, the snowball and the avalanche. The avalanche method involves listing your debt from highest to lowest interest rate. 

Focus on those High-Rate Debts First

The snowball method involves listing your debts by amount owed, from smallest to largest. Any extra money goes to paying off the smaller debts first to knock them off the list.

Avoid the Debt Payoff Trap

Debt companies aren’t going to make it easy for you to get out from under their thumbs. The longer you rely on their money, the more interest you’ll end up paying.

Emergency Cash can Save Your Financial Life

You can spend months paying down your debt but it could all go out the window if you don’t have an emergency fund for unforeseen bills. This means saving at least between three and six months’ worth of expenses. 

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