COLORADO SPRINGS — With the new year, comes New Year’s resolutions, and some people might be looking to pay off holiday debt. If this is you, you’re not alone.
According to Forbes Career Builder, 41 percent of Americans live paycheck to paycheck.
As we enter the new year, many Americans are dealing with credit card debt. In fact, Coloradans have an average of $6,762 dollars in credit card debt. The national credit card balance is $925 billion.
I spoke with debt reduction expert Larry Dozier on what you can do to get out of debt. Larry is the vice president and trust officer at Integrity Wealth Advisors in Colorado Springs.
“You know when they get maybe a Christmas bonus or they bring in some extra income, they are using it to go do things that they want to do but unfortunately, they should be using that money to pay off debt, that’s key right. If you have debt, just get it paid off as quickly as you can,” said Dozier.
“Don’t carry over that debt because as you know, credit cards are over 20 percent annually in interest. The interest rate annually is 20 percent so do your best, try to get that credit card paid off monthly.”
He suggests using finance personality’s Dave Ramsey’s debt snowball method. This debt reduction strategy has you pay off your debts in order of smallest to largest, regardless of interest rate. This is to help you deal with unforeseen circumstances. Larry tells me when he was in his 20’s he was suffering from credit card debt and used the snowball method to gain financial freedom over time. Below are some pointers on how you can get out of debt.
BEST WAYS TO GET OUT OF DEBT:
- SAVE A 1,000 DOLLAR EMERGENCY FUND
- PAY OFF DEBT USING DAVE RAMSEY’S DEBT SNOWBALL METHOD
- PAY OFF YOUR LOWEST DEBT FIRST
- IF YOU GET EXTRA MONEY AS A GIFT, USE IT TO PAY OFF DEBT
It’s important to note, that there are other methods to get out of debt. Some might choose to pay off higher interest loans first. This is just one method recommended by a local financial expert. If you would like more advice on how to get out of debt, it could benefit you to speak with a debt reduction expert.
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