Manage Your Debt

Financially speaking, debt sucks. Emotionally speaking, debt sucks, even worse. Outstanding debt can make one feel overwhelmed, frustrated and depressed. After a while, the toll that it takes on your well being can be more than the average man can handle. So, the obvious answer is to get a handle on your debt, if for nothing else, it could be a lifesaver.

According to a recent report on Cardtrack.com, Americans dug themselves into a $9 billion hole in June, just after putting up $7 billion worth of debt in May. In fact, for the first time ever, the revolving debt of Americans has topped $900 billion - $903.9 billion, to be exact. On an individual level, Americans average debt in the area north of $6,000. Unfortunately, a disturbing minority, 13 percent of Americans, can claim debt higher than $25,000.

Credit cards are the culprit, it seems, as Americans often have upwards of ten cards spread out within a single household. Adding to the damage these pesky cards cause, subconsciously, they invoke our need to overspend; and in terms of our health, overeat. Person's in possession of a credit card are more likely to order more food to eat and to spend upwards of 30 percent more on everyday purchases than if they only had cash lining their pockets.

Exorbitant interest rates are how credit card companies make their money. Negotiating a lower interest rate is key in managing your debt and making it more feasible to pay it off in a diligent manner. Look at your debt in one of two ways: start paying off your highest interest card first, and then manage interest by making intelligent, well-thought-out balance transfers (look for a rate as close to 10 percent as you can manage) or pay off your smallest balance first, while negotiating drops in interest with the credit card companies. Either way, you're making a return by simultaneously reducing what you owe and the amount of money you're paying just to be in debt.

For a young person, especially, or someone preparing to start a family, it is imperative that he or she perform plastic surgery, eliminating the need to spend and the ability to overspend. Shockingly, the Commerce Department issued a release stating that Americans spend 1 percent more than they earn, which allows for precious little - actually, a complete absence of - savings.

Hoarding as much of your monthly paycheck, while you reduce - or better yet, after you have completely eliminated your debt, is one of the smartest ways to not only save money, but also reduce your dependency on credit cards. While it seems to be a common conception that cards be used for expenses that inexplicably pop up, this is really just a cop out. Your budget needs to take into consideration what you own, not simply what you need to live and what you want, when you have enough money. Even the most well maintained cars break down. Houses have pluming and electrical concerns, to start with, but even those issues typically grow into something more. The message here is, because you have such things means you should be putting money away for when they do break, because they will. Eliminate your surprise and you'll keep the card in your wallet.

Finally, even beyond a blown gasket or leaky roof, a rainy day can come in the form on unemployment. Your best bet is to stow as much as you can afford for such an occurrence. Try a high-yield money market - to start with and as soon as you have enough greenbacks to cover you for a 6-month drought in work - should that happen, start putting your money to work for you. The younger you are, the easier it will be to recover from an investment that didn't go the way it should have. Remember, you're not playing with money you need, necessarily, so use what you can to make yourself a little more.

Pull yourself from the clutches of credit card debt and reduce your mental dependency on them at the same time. Paying off your debt not only will give you more restful nights and less stress filled days, but it will also fill you with a sense of accomplishment. Especially when the money you'd be giving away starts sitting in your bank account.