Decades ago, people were only able to buy the products that they could afford. If someone wanted a new pair of shoes, they had to have cash on hand to make that purchase. Even when it came to homes and cars, banks were much more cautious about the loans that they gave to individuals. Although there are many benefits to our current economy, there are also many downsides. With so many people having access to high-limit credit cards and minimal down payments, it is easy to accrue an unbearable amount of debt. In this article, we will share the most common types of debt that young families are likely to have, while sharing tips for lowering debt quickly.
1. Student Loan Debt
According to recent studies, over 54% of college graduates are incurring debt because of their student loans. Due to of this phenomenon, many people are struggling to pay off their student loans over the course of 15 years. Many young individuals are starting families while still under the burden of student debt. By paying more than the minimum payment on your loan each month, you will lower your interest rates and expedite the payment plan. After a period of time, you can refinance your student loan and secure a better interest rate. Depending on your degree and career path, there may be a loan forgiveness program that allows you to work within a certain industry for a period of time in order to get a percentage of your loan forgiven.
2. Credit Card Debt
There is over $750 billion of credit card debt that is outstanding in the United States. This statistic is absolutely staggering. Most commonly, this debt is incurred by people between the ages of 24 and 36. If you are looking to mitigate the money you owe towards a credit card, consolidate your purchases onto a single credit card rather than spreading your debt across many cards. Spend only the amount of money that you can afford to pay off at the end of each month. As you work to adhere to a strict budget, you will have additional funding to pay down your looming debts.
3. Medical Debt
Many healthcare processes are radically expensive. Whether you break a foot, suffer from a chronic illness, or become pregnant, it is easy to acquire an ongoing list of unpaid medical bills. Although many healthcare providers offer an option to follow a short-term payment plan, there are many facilities that are not designed to manage long-term patient payment plans. Due to the resources required to operate a hospital, funds are needed immediately. With young families, the total amount of medical expenses incurred continues compiling over time.
When you receive a medical bill, take the time to negotiate the total amount owed with both the insurance agency and the healthcare provider. In many situations, providers will provide a percentage off of the total amount when you agree to pay off the expense quickly. Consider getting a small loan that will allow you to pay down medical expenses without incurring debt or being sought out by a debt collection agency.
Summary
The easiest way to manage debt is by proactively taking steps to eliminate debt. Sites like https://www.mycanadapayday.com/blog/5-budget-friendly-strategies-to-keep-you-from-incurring-debt offer strategies that help families minimize debt in a strategic way. If you have already incurred a significant amount of debt, you can work diligently to navigate this reality by making timely payments, budgeting, and refinancing your loans.
