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The idea of having debt for life can be upsetting. Read on for ways to avoid that fate.
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Being in debt can be extremely stressful. This especially holds true if you’re having difficulty keeping up with your debt payments, or if they’re preventing you from meeting other important financial goals.
Recent data from Northwestern Mutual shows that U.S. consumers owe an average of $21,800 in non-mortgage debt. And while 49% expect to carry that debt for up to five years, 10% expect to be in debt for the rest of their lives.
That’s clearly not a good thing. So if you feel you’re doomed to a lifetime of debt, you should know that you may have more options than you think.
A change in habits could go a long way
Some people end up with debt not due to spending frivolously, but due to encountering unanticipated expenses that their savings account can’t handle. A good 7% of consumers, for example, are carrying medical debt, says Northwestern Mutual. That type of debt is often unavoidable. Similarly, you might land in debt due to an expensive home repair you can’t delay, for your own safety.
But you should know that you don’t have to resign yourself to carrying debt for the rest of your life. If you’re willing to reexamine your spending habits and make changes, you may find that you’re able to free up extra money each month for debt payoff purposes. And even if it’s only a small amount on a monthly basis, it could go a long way.
It pays to do a spending audit and see where your money has been going. You may not be able to get out of your $1,100 monthly mortgage payment or your $375 monthly car payment. But you can stop spending $150 a month on restaurant meals and takeout and instead cook more meals at home.
Consolidating your debt could make it less expensive
Northwestern Mutual reports that 28% of consumers owe money in credit card form. If that’s the sort of debt you have, it’s easy to see why you may be resigned to a lifetime of it. But things don’t have to be that way.
If you’re able to consolidate your credit card debt via a personal or home equity loan, you might lower the amount of interest you’re paying on it tremendously. And that alone could make it possible to shed that debt sooner.
Plus, when your debt is consolidated into a fixed loan, you get the benefit of predictable monthly payments. That could make your debt much easier to manage.
It’s easy enough to get trapped in a cycle of debt, but that’s not a good thing at all. It’s also not great for your mental health to imagine yourself paying off debt for the rest of your life. So if that’s the boat you’ve landed in, explore your options for making your debt less expensive. And, push yourself to make changes that allow you to free up more funds for debt payoff purposes on a regular basis.
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