You probably know that good financial decisions can make life better, but did you know that every financial challenge has a solution? If you are ready to learn new skills that will change your life, read on! Better Business Bureau and Clearpoint.org are encouraging consumers to be “calculated budgeters” in their efforts to get out of debt and increase savings. In light of record-breaking household debt, here are the five most common financial challenges with tips to help you be more calculated in budgeting and debt reduction:
Most credit card companies will lower interest rates when asked, especially if you mention a “hardship plan.” If they won’t budge, try debt management through a nonprofit credit counselor. Lower rates mean your payments go more toward principal instead of interest.
Millions of Americans struggle with student loans. You may feel helpless and confused about where to start, but it’s important to understand your repayment options. Work with your loan servicer to learn about consolidation, loan rehabilitation, income-based repayment, loan forgiveness, and more!
For many, a car is critical to earning a living and keeping up with busy lives. It’s also seen as a status symbol and badge of independence. While transportation is a “need”, a fancy new car or extra options is a “want”. Be careful not to stretch your budget, or you may find yourself struggling to pay.
As healthcare costs rise, so does medical debt. In fact, it’s one of the leading causes of bankruptcy. While medical bills are steep, they also come with unique opportunities to manage the expenses, like negotiation, financial aid, and prescription co-pay assistance.
Home-ownership has long been part of the American Dream, but mortgage debt can last a lifetime. Experts recommend a debt-to-income ratio (based on gross income and including all debt) of no more than 40% for a healthy budget. This is known as your “back-end DTI”.
NOTE: Clearpoint.org is powered by Money Management International (MMI), a national nonprofit promoting financial wellness through empowered choices. MMI is a member of the National Foundation for Credit Counseling. Clearpoint is a systemwide BBB Accredited Business and a Council of Better Business Bureaus National Partner.