Is your New Year’s Resolution to get out of debt? Improving your finances and increasing your savings is a common goal on Jan. 1, but it’s not always easy.
If you are in debt, you’re not alone; total American household debt is only rising. According to the U.S. Federal Reserve’s Center for Microeconomic Data, the total household debt increased by $92 billion to $13.95 trillion in the third quarter of 2019.
Although getting out of debt, especially credit card debt, may seem daunting, it can start you on the road to financial freedom and wealth creation.
If you want to get your finances in order in 2020 and stick to your New Year’s resolution, follow these tips from the Better Business Bureau:
Take a closer look at your credit cards. Credit cards are known for their high interest rates, and this can waste a lot of money over time. See if you can use a balance transfer offer to switch to a card with a lower rate. Make sure to read the terms and contract very carefully – there may be big penalties if you miss a payment. If you have multiple cards, decide which debt-paying strategy is best for you.
Try sending in payments throughout the month. Put the $5 you would have spent on a morning coffee towards your debt instead!
Take advantage of free tools. There are many online tools that can help you manage and reduce your debt. A great place to start is the BBB Financial Building Blocks website, which helps consumers evaluate their finances, learn how to stay debt-free, and protect themselves from scams and illegal collection calls. This free and easy-to-use debt solution tool can also be used to find options for managing your debt.
Start budgeting. Creating a written budget and tracking your spending is one of the best ways to save money and stop spending more than you earn.