Downsizing DebtFiscal Fitness Clubs of America
The average household credit card debt has increased from $15,762 in 2015 to $16,061 in 2016, according to the American Household Credit Card Debt Study by Nerd Wallet. Student loan debt increased from $48,172 to $49,042. If you carry car loans, the average is $28,535. In total, the average American household has $132,529 of debt and the average rate on credit cards is 18.76%!!!!!! That means the average household is paying $1,292 in credit card interest each year. That’s a really nice vacation or college savings! Another startling and disturbing fact is that consumers consistently and vastly underestimate how much they owe. In fact, actual debt on average is 155% greater than consumers reported.
Now, there are lots of reasons debt has increased so much over the last few years, and it isn’t just “irresponsible spending”. Cost of living has outpaced growth in salaries. The problem is that because of the ease of using credit and debit cards, we aren’t as connected with our cash flow as when we had to balance a checkbook each month.
That’s the problem…now to the solutions.
First, take heart…and control of your debt. We have successfully helped many people cut their debt free date IN HALF, without additional funds, by simply managing debt efficiently! Really!!!!
Start by taking on the “Breaking Debt Challenge”, which is part of the focus for this month’s action class. By simply learning about it and attacking the issue smartly, you can save thousands of dollars. Here are the steps for our breaking debt challenge:
- Complete the debt discussion sheet with your partner or money buddy
- Review the breaking debt session. Go to your online classroom for the link, if you’re a club member.
- Get your annual free credit report at http://www.annualcreditreport.com/, review it, and put it in the cloud. Mint or Credit Karma can give you your credit score.
- Complete the consumer debt page (and student loans if you have them) in your playbook. (Club members only)
- Notify your coach when it’s complete and ask for a debt restructure. (Club members only)
- Review the results.
- Make a plan and identify your debt free dates. Enter these as a goal in your playbook or a spreadsheet you’ve developed to track your progress.
- Contact your coach for additional help, strategies, or clarity on the results. (Club members only)
Fiscal Fitness Clubs has all the tools, resources, and coaching from CERTIFIED FINANCIAL PLANNERS™ to make accomplishing these tasks simple and effective. But whether you use us or not, you should still do these things and get prepared for “Downsizing Debt”.