Debt does affect many Americans. Whether it is caused by the loss of a job, medical expenses, student loans, unexpected bills, or a change in family situation such as death or divorce, debt can be a crushing blow to a person or family.

Debt Advice

When someone has debt, what can be done to safely navigate out of it toward financial health again? The National Foundation for Credit Counseling offers these tips for dealing with debt problems:

  • Don’t hide shopping habits from other family members,
  • Don’t get a new credit card just because the old cards are maxed out on spending,
  • Don’t use the credit cards when there is no money left to pay bills,
  • Do pay more than the minimum payment on the credit card bill,
  • Do cut back on the living expenses as much as possible,
  • Do try to work with creditors, and
  • Do get help from a credit counselor.

Credit Solutions

The Federal Trade Commission (FTC) recommends that people struggling with debt develop a budget as the first step in gaining control of their financial situation. The budget can be simple. There needs to be a list of all income, a list of fixed expenses (rent or mortgage payment, car payment, phone bill, insurance premiums, etc.), and a list of expenses that vary (entertainment, recreation, clothes, etc.). Writing down all of the money that is coming and going out of a person’s wallet can be helpful in understanding spending patterns and setting priorities in spending.