Personal financial management is one of the most important aspects of being an adult―an yet it is not part of the core curriculum of our education system. Many Americans graduate from high school, and even higher education, not having formally studied basic financial management. Budgeting, saving, borrowing and paying back money, how home mortgages operate, how to invest and ensure adequate retirement funds, and other critical money matters are important concepts for everyone to understand managing debt.

Getting into debt is certainly not uncommon. Americans owe more than $1 trillion in credit card debt; Americans are more burdened by student loan debt than ever. But there is hope. By practicing sound financial management you can get out of debt and build financial stability. We encourage you to learn all you can about personal financial management best practices! As a starting point, follow these tips for managing debt.

  1. Create a budget and stick to it.

Sticking to a budget ensures that you’re in control of your finances. Keeping a close watch on your income minus expenses is critical to maintaining financial health, and building financial wealth.

It is nearly impossible to spend within reason or to plan savings if you are not aware of how your spending compares to your income. Do you know where your money is going? Do you know how much you are saving, or how much you should be saving to reach your financial goals? Budget.

  1. Pay off your most expensive debt first.

This does not necessarily mean paying off your highest balance first. Your most expensive debt is the one with the highest interest rate. Carrying high-interest debt forward can cost you significantly more to pay back than the principal amount you actually borrowed. Focus on paying off your most expensive debt first, then rinse and repeat until you are debt free.

  1. Have an adequate emergency fund.

You can’t plan for emergencies―but you can plan for the costs of emergencies. Best practice is to have at least six months of living expenses in liquid savings. A safety net of cash to draw upon should it become necessary means you will be less likely to fall behind on your bills and less likely to fall further into debt due to an emergency.

  1. Improve your credit.

By improving your credit you can improve the terms by which you borrow money. Lower interest rates can have a dramatic impact on the costs of your debt.

Improving your credit does not mean opening more lines of credit or credit cards. Instead, review your credit report to ensure your accounts are accurately reporting and then continually monitoring it. Read our article Order A Free Credit Report. Take proactive steps to improve your credit score by reducing large balances and always making timely payments.

  1. Prioritize paying off debt.

Decide that paying off your debt is important to you. Choose to pay off the debt over unnecessary spending or luxury items, forgo the new phone, fancy dinners out, and the five-dollar latte.

The goals we prioritize are the goals we achieve. Focus your priority, intent, and energy in paying back your debt. When you are living free from debt’s financial burden you will thank yourself!

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The Law Office of Barbara B. Braziel helps people get out of debt. We offer free consultations to people of Savannah, GA and the surrounding areas, including Richmond Hill, Hinesville, Pooler, Port Wentworth, Tybee Island, Clyo, Ellabel, Midway, Ludowici, Springfield, Pembroke, Brooklet, and Garden City.

We are a debt relief agency. We help people file for bankruptcy relief under the U.S. Bankruptcy Code.

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