Financial Statistics to Know
With an overwhelmingly increasing number of people in debt, New Era Debt Solutions wants you to know you are not alone when dealing with this burden. Too often, stress and pressure can make your financial situation even more difficult. We want to alleviate some of that stress in taking a look at debt by the numbers and what you can do. Let’s take a step back and look at the statistics to understand that this happens to more people than you may think.
Average Credit Card Debt
Credit card debt – the national average seems to climb every year. The average credit card debt of U.S. households in 2017 was $5,700. This number was calculated based on spending for one year by individuals older than age 18. If you are burdened by credit card debt, you are not alone. Banks and stores make it effortless to open credit cards, especially with tempting incentives. 40% off your purchase when you open a credit card today. Up to $500 cash back when you open a new credit card with your bank. The deals and offers are endless, which is crucial to know when they try to appeal to you.
There will be a better offer in the future, if not the same one. Ask yourself if the deals are worth the danger of opening a new credit card. Don’t contribute to your credit card debt or start creating it by getting sucked in by these offers. Get on the road to financial freedom by focusing on settling your current debt and remembering that most of those deals come with fine print.
Student Loan Stats
Colleges and universities are notorious for their expensive tuition that easily rises each year. According to CNBC, “the average cost for one year at a public university for an in-state student is $20,090. That increases to $34,220 if you hail from out of state.” They also report the national student debt average for over 44 million Americans at $1.4 trillion and growing.
Over 40 million people are burdened solely by student loans when they leave college with their degree. Monthly student loan payments can add an extra burden on your finances, especially because the payments can be steep, depending on your debt total and the amount of time you spent at the institution.
The key to success with student loans is to pay as much as you can each month to get any interest you have accumulated paid off. Ultimately, you’ll want to pay off your principal balance to significantly reduce what you owe. Setting up automatic payments can help keep you on track. Take a look at these payments every couple of months to see if you can contribute more or need to contribute less.
Following Financial Freedom Tips
How often have you been advised to create a budget, cut credit card spending, or follow any other financial tip? New Era has mentioned the word “budget” several times in our financial planning tips, but we came across an interesting article discussing the psychology of the word.
In Kristin Wong’s article about why Americans can’t stick to their budgets, she cites psychologist Brad Klontz, who dissects the psychological aspects of the word “budget.” Klontz states, “Your emotional brain responds to the word budget the same way it responds to the word diet. The connotation is deprivation, suffering, agony, depression.”
His suggestion? You should strive to work “with your psychology, and not against it.” This means rewording and restructuring your financial plan to foster success. Rather than calling it a “budget,” you can call it a spending plan. A simple rename refocuses the attention of a limiting budget to a goal-achieving financial plan. The attitude is switched from worrying about limiting your spending to accomplishing your financial goals. Who knew that a little psychology could go a long way with one word?
Are you struggling with debt and financial stability? New Era Debt Solutions is here to help. We’ve offered people-friendly debt relief services since 1999. Contact us for a free consultation to start living debt free or call (800) 527-4421.