By David Compton / guest columnist
October 12, 2008 01:17 am
—
Millions of American households are behind the eight ball when it comes to excess debt. It might surprise some people to learn that even those with high earnings are not exempt.
The ability to pay one’s debts is not always a matter of earning enough money. Many of those in debt feel that the next pay raise will solve their debt problems. This is rarely the case. Debt control and money management are more a matter of attitude than of income level. If you can’t stay out of debt when your income is $60,000 a year, the chances are you won’t do any better at $80,000 a year unless you change your spending and saving habits.
A typical person with debt problems will have about four to six different credit cards and owe anywhere from $5,000 to $80,000. All of these debts require monthly payments, and many of them are at interest rates of 18% or more. If you are not paying off the entire balance of your credit cards each month, you may be a candidate for debt consolidation and possibly debt counseling.
Before you enlist the help of others, review your spending habits. Go through the past twelve months of your credit card charges and cancelled checks. See what items you could have lived without. Perhaps the $100 gift for a friend could have been a nice card or a $30 lunch date. A pass through a year of your spending habits will be very educational. If you design a budget (one you can actually live by) for future spending and saving, you may be your own best counselor.
It is difficult for many of us to admit that we need help with our finances. You may not be able to discuss your problem with your friends, relatives, or co-workers.
David Compton is a
Certified Public Accountant with offices in Meridian and Birmingham, Ala.
Copyright © 1999-2008 cnhi, inc.