SAN DIEGO - September 9, 2020 - (Newswire.com)
According to a recent study conducted by Experian, total consumer debt in the U.S. is at an all-time high of $14.1 trillion, with an average personal debt of over $90,000 per American. Reducing debt obligations enables one to deploy money to earn interest, save for a home, fund college plans for children, and most importantly, fund a retirement and achieve financial security. Steve Sexton, financial consultant and CEO of Sexton Advisory Group, shares some tips to reduce debt and take effective steps towards financial freedom.
· Organize your debt. “List all your debts in one worksheet, including credit cards, auto loans, personal loans, mortgage payments, etc. from lowest balance to highest,” says Sexton. “Next to each debt, list the minimum monthly payment, interest rate, and payment due dates.”
· Implement a strategy for paying off debts. “Next, you’ll want to prioritize paying off debt with the highest interest rate first,” adds Sexton. “This is where listing your debts in the style above is useful in helping you visualize which payments are a priority. From there, you can implement the debt avalanche method, which entails paying as much as you can on debts the with highest interest rates and making the minimum payments for all remaining debts on a monthly basis. Once you pay off one high-interest debt, add the amount you were paying to the minimum payment for the next highest interest rate debt. Over time, this method will reduce the amount you pay in interest.”
· Reduce your monthly living expenses. “It’s surprising how small expenses can add up over the month,” says Sexton. “Evaluate what you really need and eliminate expenses that aren’t necessary to create a buffer for future emergencies. This can mean limiting takeout/delivery or making more home-cooked meals, terminating unused subscriptions or wine club memberships, or swapping out cable for an affordable streaming service. Over time, these small changes can help you build momentum, reduce your debt, and achieve financial freedom.”
· Shop around for lower rates. “My advice to clients is it’s always better to earn interest than pay interest,” says Sexton. “With interest rates lower than they’ve been in a while, this is a good time to shop around for lower auto or homeowner’s insurance rates, credit card rates, or refinance your mortgage to lower your monthly financial commitments.”
For more information on Sexton Advisory Group, please visit https://www.sextonadvisorygroup.com/
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Original Source: Sexton Advisory Group Outlines Effective Debt Reduction Tips
