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How can I reduce credit card debt ?

When credit card debt grows out of control, your financial future may be in jeopardy. That is why establishing a reasonable budget – and sticking to it – is so important. A budget can keep you on track financially, but it can also ensure you are able to pay down debt at a faster rate.

Because many people have difficulty getting started, USA Today recommends the following personal budgeting tips. The sooner you put these tips into action, the sooner you will get a handle on your credit card debt.

Review all expenses

You must know where you stand financially. Track all spending, including things mortgage payments, utility costs, and groceries, for one month. Once you have a good idea of what you owe each month, compare it to your income. Now you will understand how much money you have to work with when it comes to reducing your debt.

Increase work hours or take up a side job

If upon reviewing your expenses you realize you do not have the income to cover all expenses, you will need to expand it. If possible, see if you can take on extra shifts at work. Take extra money earned and apply it to your debt and savings. If you are not able to take on extra hours, increase your income with a side job. There are many work-from-home opportunities available now, many of which only require a laptop and internet connection to perform.

Set up automatic savings

Just because you are focusing on paying down your debt does not mean you should neglect your savings. Savings can actually prevent debt accumulation in the future since you will not need to rely on credit cards in the event of an emergency expense. Automating payments ensures some portion of your income is set aside each month for unexpected expenses.

While the above advice is definitely helpful, you may also consider other options if your credit card debt is far out of hand. For example, filing for bankruptcy may be the right choice if you are constantly plagued by creditors or there is a serious discrepancy between the amount you owe and your income. No matter which option you choose, adopting responsible financial habits will benefit you greatly.

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