Does your credit card balance look higher than last year? Statistically, Americans increased their credit card debt by 5.9%, according to Equifax.1
Between child-care expenses, groceries, health insurance, taxes – how do you balance saving AND paying off debt?
- Know that it can be done. You may have to brown-bag your lunch, car-pool with a friend or pick up a second job – but this can be done.
- Create an emergency savings fund. How much? Start with $1,000.
- If your employer offers a 401(k) or 403(b) – maximize that benefit.
- Prioritize your debt. Pay off either the highest interest debt first or the smallest amounts first.
- Celebrate the small victories! Once you’ve reached your goal – whether that’s tucking away sufficient money in an emergency savings fund, paying off a credit card, or seeing the accumulation of your retirement plan at work – take some money and splurge a little on yourself. But keep it reasonable — and don’t charge it.
1 Todd Campbell, “The Average American’s Credit Card Debt Grew This Much Last Year — How Do You Compare?” Fool.com, March 15, 2015. (http://www.fool.com/investing/general/2015/03/15/the-average-americans-credit-card-debt-grew-this-m.aspx)
2 www.bankrate.com, 401(k) Retirement Savings Calculator, calculated 05/2015.