Your Personal Debt Ceiling

: Chris Lee Law Firm

  Filed under: Debt

Debt ceilingLately, much attention has been given to the national debt and the debate over how to fix it. We owe more than we can afford to pay back, we lack the money needed to pay our national “everyday” expenses and our time is running out. Despite the indecision of the government to find a solution, we could all learn something from this problem. What are we, as individuals and families, doing about our personal debt ceiling?

In Over Our Heads

The average American family has three or more credit cards, each with thousands of dollars in debt. People are facing financial hardships due to unexpected loss of a job and they are losing their assets due to the lack of income to pay their bills. Bankruptcy filings are increasing and the number of homes in foreclosure hit a high point recently. Most people lack an adequate savings account and those that should be retiring have to work to make ends meet. There is a growing epidemic of fiscal irresponsibility, both as a country and as individuals.

It isn’t uncommon to watch peoples spending habits evolve over time. Many people aren’t even aware they are sinking further into debt until it is too late. I bet you know at least one person who doesn’t even know how much debt they actually have or that will admit to paying one or more bills late every month. Even worse, most of us either have or may use one line of credit to pay off another debt. Transferring balances and juggling debts between cards only exacerbates the problem over time.

Save Yourself By Setting Limits

It is becoming more important than ever that we develop a plan and get on board with becoming more financially responsible. The truth is we tend to prioritize so many aspects of our lives, except for money management. It doesn’t take long to review your monthly income and expenses, create a budget, cut back on luxuries and save money. In fact, if everyone identified one unnecessary expense per member of the household to do without, the average family could save hundreds of dollars each month.

All it takes is a plan. Without a plan, most of us will push off money management to the back burner. It is easy to forget about an idea or promise to do something if you don’t have something to keep you in check. Get the family involved in creating a budget, making each member responsible for one aspect of keeping up with the plan. Develop both short and long term goals for things the family would like to work towards purchasing. Don’t end up in the same crisis we face as a nation, take control over your finances and make a plan for your financial future.

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