Tips and habits that can help with debt management

As of 2017, American households carried a collective $13 trillion in household debt, according to the Federal Reserve Bank of New York. These numbers no doubt signal that Connecticut families who are struggling with debt are not alone. Luckily, there are some debt management tactics people can use to lighten their financial load.

People who get into trouble by spending their paycheck right away should consider automating their contributions to savings or debt repayment from the minute their get paid. This will keep them from thinking they have disposable income that should really go toward savings. An emergency fund is also an important thing to understand, especially for those paying down debt. These savings will ensure that should an emergency arise, no further debt will be needed to cover expenses. 

For some, it is easier to get motivated about debt repayment when paying off smaller balances first. This can create a system of “small wins” along the way to a debt-free life. Of course, payment deadlines and minimum payments should always take precedent to improve credit scores and keep debts from collections. Keeping aware of the reality of interest payments by calculating how much one is paying in interest per week or day is another way to stay motivated.

For some Connecticut families, debt can become overwhelming. This can happen for a variety of reasons that are not always spending-related, from unexpected medical bills to the loss of a job. While sometimes following debt repayment tips can help, other times more serious debt management programs or bankruptcy may be the best choice. An attorney in the state can help clarify these options for anyone who needs information or guidance in these matters.