In the past decade, U.S. consumers have had a hard time maintaining a balance between their income and their debt due to economic and personal factors. According to 2011 Federal Reserve statistics, the total amount of consumer debt in the U.S. was nearly $2.4 trillion in 2010, including credit card and home loans.
Despite the recent economic upturn, these are financially rough times for everyone. You work hard for your money and you want to make sure that, especially during these economically volatile times, it doesn’t go to waste paying another high interest rate. By prioritizing your debt, you will maximize your payments, save your credit, and achieve a more manageable debt.
Focus on Your Home First
The roof over your head should always be your main priority. Taking care of your home mortgage is important, but the options for refinancing your home and maintaining affordable payments can be daunting. However, with the new HARP 2.0 guidelines released to offer underwater homeowners better rates, you may be surprised at what you’ll be able to afford.
You can get refinancing options though any of the bigger lenders like Lending Tree or Quicken Loans. You can also go through mortgage bankers, like the direct mortgage lender New American Funding, as they don’t charge you brokerage fees like a mortgage broker would.
Reducing or Eliminating Your Bills
Look for bills that can be reduced or eliminated. Do you really need to pay $150 each month on cable? (How many of those 1,000 channels are you actually watching?) With Internet streaming as popular as it is, you can practically watch any show online for free, too. Or, consider opting for a Hulu subscription for $8/month.
When it comes to your electricity bill, a few degrees here and there can easily equate to hundreds of dollars in savings. In the summer, keep it set at 78 when you’re home and 85 when you’re at work. Madison Gas and Electric has a great chart on how much you could save with just a few degrees' difference.
Article comments
1 - Knoton Lyon
This is great advice. We don't have a ton of debt outside of our mortgages, so I just keep track of it in my head. We usually pay off the few cards we have each month to avoid interest.