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Pennsylvanians are struggling under the weight of debt. According to a report, Pennsylvania has the fifth largest amount of credit card debt in the nation at $33.2 billion. The Washington Examiner reports that Pennsylvanians also carry the highest student loan debt in the country at an average of $35,185 per borrower. If you are like many people in Pennsylvania, getting out from under the weight of your debts is your ultimate goal. In order to get out of debt, it will be important for you to implement effective strategies for money management. Here are five strategies for organizing your finances that might help you to get back on track with your money and get out of debt.

1. Know Your Income and Expenses

One of the first things that you should do is to make certain that you have a clear understanding of your income and your expenses. Your expenses are more than just the bills that you pay. They also include all of the money that you spend during the month. To get a clear picture of your spending habits, you should track it for a month. Save all of your receipts, including those for items that you purchased with cash or credit. At the end of the month, add up your receipts and compare them with your bank statement information so that you can arrive at a total expense amount.

After you have learned what your monthly expenses are, add up all of your take-home income for the month. Subtract your expenses from your monthly income. If you get a negative number, you are going to need to look at ways to reduce your spending so that it at least balances out to zero. It is better if you can look at ways to reduce your spending so that you have a positive number instead. If you have a positive number after subtracting your expenses from your income, you can choose to allocate it to repay your debts.

2. Make a Budget

Once you know your income and expenses, it is time for you to make a good budget. While following a budget may seem difficult, it is an important strategy for becoming debt-free. Your budget should be realistic and allow for room for you to save money, pay for your normal living expenses and pay extra sums toward your debt balances.

3. Apply for Debt Consolidation Loans Pennsylvania

Debt consolidation loans Pennsylvania can make paying off your debts easier by consolidating the different types of debts that you have into one loan. You then will need to make a single payment each month for your debt consolidation loan at an interest rate that will likely be lower than some of your high-interest credit cards. This can help you to pay off your debts much faster than if you continue to make the minimum monthly payments to all of your creditors.

If you have too many payments and are in danger of falling behind on them, getting a debt consolidation loan may be a way for you to save your credit and avoid collection activities, including lawsuits and garnishments. In Pennsylvania, creditors have a four-year statute of limitations to pursue the collection of most types of debts after you have defaulted on them. The statutory time period begins to run from the date of your last activity. Instead of hoping that four years will pass without action from your creditors, it is better to take steps to pay your debts with a debt consolidation loan Pennsylvania so that you can preserve your credit and avoid judgments and garnishments.

4. Save For a Rainy Day

Some people make the mistake of failing to save money while they are working to pay off their debts. If you don’t save money in an emergency fund, you may find yourself going deeper into debt if something unexpected happens. A good rule of thumb is that you should save at least three to six months worth of your monthly income in an emergency fund. Leave the money there so that it is available if you experience a job loss, car repair or other event that could otherwise financially cripple you. In addition to saving an emergency fund, you should also try to save at least 10 percent of your monthly income toward your retirement.

5. Know Your Credit

Your credit score is important and can follow you throughout your life. If you have a low credit score, you may have trouble securing loans, gaining approval for a mortgage, securing certain jobs and finding an apartment. It is important for you to regularly monitor your credit reports so that you can identify any errors and have them corrected. Each year, you are able to get one free copy of your credit report from each of the three major credit reporting agencies in the U.S., including Experian, Equifax and TransUnion.

Instead of ordering all three at one time, you might want to request one every four months. When you get your copy, review it carefully and highlight any mistakes that you find. You can challenge incorrect information with the credit reporting agency directly. The agency will then contact the creditor to verify that the information is correct. If it is not correct or cannot be verified, the negative information will be removed.

Use Strategies for Money Management and Work with a Professional

Becoming debt-free is not impossible for Pennsylvanians. While it might take some dedication and hard work, you can change your spending habits and be on your way to a debt-free life. Implementing these strategies for money management can help to change your relationship with money so that you can conquer your debt and enjoy a more successful financial future. To learn about our debt consolidation loans Pennsylvania, contact Christian Debt Counselors today.

Christian Debt Counselors (888) 906-3328
200 W. Palmetto Park Road Suite 200 Boca Raton FL 33432