The start of budgeting often comes from a desire to live within your means. Without budgeting, it’s easy to use credit to supplement your income. That is why paying down debt is a common financial goal.
Consider these statistics from debt.org:
“More than 160 million Americans have credit cards. The average credit card holder has at least three cards. On average, each household with a credit card carries more than $15,000 in credit card debt. Total U.S. consumer debt is at $11.4 trillion.”
Credit cards can be a valuable financial tool. They typically come with rewards for using them, and can offer quick short-term financing for unexpected expenses. The key is to use them responsibly. If you charge something to a credit card, you should have a plan to repay it that includes credit card payments in your monthly budget.
If you’re working now to pay off debt from a credit card, student loan, car loan, or anything else, it’s important to make sure this goal is a priority in your budget. If your goal is to pay more than the minimum payment every month, stick to it. Keep in mind that any sacrifices you make now to pay off that debt, will be affordable again once it’s paid off.
Here’s a tool to help you get started.