Author: Lynnette Khalfani Cox, themoneycoach, TBNM contributor
Debt is a massive problem in America. We’re up to our eyeballs in debt of all types: mortgage loans, credit card debt, student loans, automobile loans, and more.
Even though home values have plummeted, the average mortgage balance in the U.S. is nearly $200,000; the typical family carries a monthly credit-card balance of $10,000; the average college graduate owes more than $20,000 in student loans; and the median car note now exceeds $27,000. Is it any wonder that Americans owe $2.4 trillion in consumer debt, excluding their mortgages? Throw in another $14 trillion or so in home loans, and it’s clear why our collective debt won’t go away any time soon.
From a credit standpoint please understand that the type of debt you’re carrying matters tremendously when it comes to your overall rating. (See the FICO credit score formula).
I’ve experienced firsthand the impact that being weighed down with debt has on one’s credit. I’ve also heard from countless individuals all around the country whose credit scores were suffering due to their having “bad” debt. Read more at The Money Coach.
What will you do to get back on track financially? I have been sticking to my budget and documenting each purchase to learn the money habits.
I’m currently on a mission to EraseMyDebt by going an extreme and I mean extreme spending diet; no red velvet cake from Abu’s, no movies, or any other non-essentials until I’ve ErasedMyDebt. It’s a challenge because there are times that I feel like I’m starving myself but debt is a huge distraction for me; it’s like someone is constantly tapping my shoulder. On the days I can’t fight the urge to satisfy my sweet tooth for Abu’s red velvet cake (or any other non-essential), I make a payment of the same amount to pay down my debt. Thanks for sharing Karen and TheMoneyCoach.