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Debt is one of those things that many individuals think that they cannot live without. However, debt is something that has been engrained into our society for a very long time. It has gotten to a point that just about everyone in America is carrying some sort of debt over their head. Corporations have spent a plethora of money on advertising to get us to think this way. The Federal Reserve tells us that the average household is carrying just shy of $130,000 worth of debt. On the other side of debt is income. Again, according to the Fed, the average income for a household is just shy of $60,000 a year. This statistic alone is very indicative of how much of America is living.
Not only is debt as a whole crippling for an individual, the number of ways that someone can rack up debt is staggering as well. It is not uncommon for one household to be carrying student loan debt, credit card debt, a mortgage, and at least one car payment in any degree (loan or lease). There are many households that are carrying more than one car payment as well, since both adults will typically need and use a car. If you think about the typical consumer spending life style that many Americans follow, it is no surprise that many Americans are living well outside their means. So much has become a status competition and the easiest way to show status is through money. Specifically, through the possessions that we own.
However, there is hope and a way. The key to getting your head above water again takes two steps. First, you have to face the music and look at just how much debt there is. You have to know exactly how much is there in order to be able to tackle it. The next step can be much more difficult and will actually take a number of little steps. The summary includes learning how to manage the money that you do have coming in order to live within your means. Once this happens, you can really start to make a dent into that mountain of debt that has piled up in the corner. Now this process of learning how to manage your income may sound like a fairly simple process. However, I can assure you that it is not. For many, this process does not just mean learning how to manage the money. This process means changing some of the most long-lasting spending habits a person has had. That is not a simple task. However, with the right support system, and a good teacher teaching you how to walk that path, the process will become easier.
The amount of debt that one person might have may seem too much to be able to tackle. However, with the right planning and careful monitoring of the spending, many individuals have overcome outrageous amounts of debt. The key is making sure that you are not spending more in the month than what is coming in. In order to ensure that this happens, there are a number of different tools out there. These tools vary in both price and capabilities, among other things. There are some ways to track spending that are free. There can be quite expensive software programs that will do this as well. The software will have other features. For example, there are some that will have charts and graphs that will compare all kinds of different income to spending and break out the categories as well. Something that I do is try out multiple tools at once in order to see how I like one directly compared to another.
By no means is this an easy process to try to change how you live. However, working toward a debt free life can be very rewarding. Having lived on both sides of the coin, I can tell you that not having half my paycheck ear marked for loan payments is very freeing. I would love to see more people in America be able to experience this freedom.