Savvy credit card users don’t use their credit cards for emergencies because they have savings set aside. But what do you do if you already have so much credit card debt that you can’t save for the future emergencies? With credit counseling, you can get rid of credit card debt in record time. Credit counselors help people enroll in Debt Management Plans that make it easy to get out of debt in less time. According to a recent article by The Street, the tops ways to avoid racking up debt includes planning your daily spending and living below your means. When you consolidate your credit card debt with a reputable agency such as Christian Credit Counselors, you enjoy the benefit of having people on your side that will go to bat for you. Your credit counselor will negotiate a lower interest rate on your different credit cards by dealing with your creditors. While paying off your credit debt with a Debt Management Plan, you don’t have to put your life on hold. Make smart financial moves so you can avoid racking up credit card debt in the future.
Using your tax refund wisely
According to an article by Money, 7 out of 10 people in the U.S. use their tax refund to pay down credit card debt. If you follow the pack, you could be unnecessarily paying more in interest than you have to. You can put your tax refund in savings for future emergencies since you won’t use credit cards while enrolled in a Debt Management Plan. Having your tax refund in savings will give you peace of mind to know you’ll easily make your monthly payment even if other unexpected expenses come up. According to Money, the average tax refund is about $3,000.
Downsizing before retirement
The reason so many retirees talk about downsizing is because they know they will be on a fixed income during retirement. Many older people downsize by moving into a less expensive home. Even if you are years away from retiring, consider downsizing as a way to avoid racking up credit card debt. Another option is to refinance your mortgage so you have a lower monthly payment. If you rent, think about moving to a less expensive city or apartment community with lower rent. Other smart ideas include living in a multi-generational household so you can share housing expenses and other bills.
Including savings in your budget
Some people save only if they have money leftover at the end of the month. The concept of “paying yourself first” is about including savings as part of your budget. Some people make it automatic by letting the bank or brokerage firm take out a certain percentage from their account or paycheck for a 401(k) or other retirement account. Even though you might not notice a difference while you are working, you’ll be less likely to rack up credit card debt in retirement if you save while young.
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