The Consumerist.com site reported on a NY Times article; the article described a woman who over the course of a few years had made several poor choices related to her finances. She amassed an incredible amount of credit card debt and has now lost her home to foreclosure. Her story may sound familiar. We may know others or even be suffering ourself from incredible debt due to credit cards or mortages. What can we do? The buck stops here, so to speak, so we need to hike up our pants and get across this impassable financial landscape.

When Fears Compound

The purchase of a small item on a credit card today can turn into a nightmarish figure by tomorrow. Take for instance a shopping trip to Best Buy. You purchase $75, putting it on your credit card with 12.9% interest. The purchase doesn’t seem so bad, right? In one month the interest would be close to a dollar. In one year, you would be paying ten dollars more for the one day’s shopping experience. Now calculate the cost of a higher balance card, assuming you shop more than one day a year, and you can easily see how credit card debt can tumble out of control.

According to the NY Times article, the average household has $8,565 in credit card debt, up 15% from 2000. Imagine having that much debt at the 12.9% interest rate, which is a dream interest rate for most people. Over a year’s time, those average Americans pay over $1,100 dollars in interest.

Learn How to Dig

I commonly hear those in debt claiming schools have not taught us enough about finance to actually make our money work for us. I think my high school Math teachers would disagree. More than likely, we do not take the time to realize the overall effect. As someone who has struggled to pull myself out of debt, it’s a long arduous road, but it can be done.

Although debt can be a slippery slope, many can and do overcome the obstacle and once again find debt relief. The tried and true methods include following a budget, paying more than the monthly minimum, and using cash to fulfill current needs.

We recommend a budget in many of our posts; we feel a budget can help you live the lifestyle to begin saving money and living a frugal life. A life on budget does not have to be boring or monotonous, and a debt free life comes without fear of interest payments.

Comment Questions

Did you pull yourself out of debt? How did you do it?