Spend Your Way Out of Debt

March 31st, 2010 |

There is a horrific plague that seems to be sweeping across America destroying homes, families and leaving people feeling hopeless. The name of this plague is debt.

The average American family carries around $8000 of credit card debt, not to mention car and home loans. To put this in perspective, if a household with $8000 of debt on a 15% APR credit card, pays $100 a month–not accruing anymore debt–it will take 29 years and six months to pay the card off and they will have paid $27,374 in interest.

Simple personal finance and money management can put a stop to debt and wealth can be acquired in its place.

Managing Personal Finances

Every cent that a person doesn’t spend purposely will eventually find some place to go and more often than not, it will not be somewhere that helps them stay out of debt.

The key to managing personal finances is assigning each and every dollar a purpose, like credit card payments, car payments or even towards a budget or a savings account. You may want a certain amount of money that you assign to nothing. This money you can spend however you want and you don’t have to feel guilty about it.

After spending money on payments, putting what you want in savings and your budget (i.e. groceries, gas, entertainment, etc.), any left-over money should be purposely spent as well, and a good place to spend it is towards debt.