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California consumers can eliminate debts by budgeting

by | Feb 5, 2014 | Chapter 7, Firm News

Overall, the debt that consumers owe in the United States amounts to billions of dollars. From overspending to living off credit cards because of unexpected life circumstances, many consumers have racked up a large amount in debt. This can leave many feeling over-stressed, but there are ways for California consumers to eliminate debts and have a brighter financial future.

Of course, paying off debt is easier said than done, but cutting out certain unnecessary expenses can help. One of the primary suggestions given by experts is to establish a budget that keeps track of income and spending. Consumers may benefit from visiting the local bank or pulling up account information online to view transaction history to see exactly where their money is going on a monthly basis. It can also help to identify the recurring expenses that are not needed, then cut them off. After sorting out these expenses, consumers may be able to figure out how much is owed in debt and gain the funds necessary to pay it off.

Secondly, consumers may wish to try to decrease a few hundred dollars from monthly bills. They may find it help to lay each bill out in front of them and compare what they are currently paying to other offers that may be available online. If the rates are lower, it may be worth it to switch companies to save back some money. Lastly, the snowball effect is a technique used in which a consumer pays the monthly minimum on all of the accounts with the exception of the high-interest account. The account with the highest interest receives a good sum of the consumer’s income until it’s paid off.

California consumers may be able to eliminate debts by budgeting and reducing the amount of unnecessary expenses. Each consumer is different and some may pay their debts off at an accelerated pace while others move at a slower pace. When consumers are unable to even pay the monthly minimum on their balances, bankruptcy may be an option to relieve their financial burdens.

Source: Fox Business, 5 Tips for Becoming Debt Free in 2014, Odysseas Papadimitriou, Feb. 3, 2014