New year brings new goals to reduce debt
Updated On: Jan 08 2014 08:37:28 PM MST
Many folks look to tackle debt as a part of their New Year's resolution.
We checked the facts on just how many Americans face credit card debt. The website Nerd Wallet crunched numbers from the Federal Reserve. They showed the average U.S. household carried just over $15,000 in credit card debt. In total Americans are $856.8 billion in credit card debt.
Wednesday morning we spoke to a financial expert to find the best practices for getting your debt under control. Michael McCormick is a wealth advisor at Cascade Financial Management. McCormick explains while there is no magic cure for your debt, there are simple steps you can take to get out of the red.
The first step is to make your debt a priority.
"You have to address this early and quickly, you really have to be your own chief financial advisor in it, because nobody cares as much as you about getting out of debt," said McCormick.
A second tip is to get creative with your money. McCormick says it is a good idea to know when you might see that extra cash and use it to tackle high interest debt. Another option is to put some of that money away in savings for a rainy day.
"We are coming up to tax filing deadlines, it might make sense to prepare your taxes early. If you know you're getting a refund you could file earlier than you have to," said McCormick.
A third piece of advice -- make a plan you can stick to.
"There is a lot of great resources online, one of my favorites is feedthepig.org, It is a nonprofit website that is really focused on helping people live debt free," said McCormick.
When you find a plan that works, McCormick says it is key to make sure you don't wind up in the same situation again. If you don't have it, don't spend it.
"If you are able to have a plan that pays off this debt, stay with it, and maybe make a savings account for next Christmas," said McCormick.