Living beyond your means: Dealing with debt

Living beyond your means: Dealing with debt

If credit card debt in the U.S. tells us anything ... It's that more middle class and poor Americans -- are living beyond their means.

The average American household has racked up a credit card debt of more than $15,000.

It's this time of year - after the holidays when the bills pour in - that a lot of people realize they overextended themselves.

For some ... It's poor planning.

For others ... It's a lack of discipline or impulse buying.

Whatever your  habits, there are resources to help you get back on track without sacrificing too much of the lifestyle you want.

For most of us--spending is easier than saving.

 "We got married he was always the finance person, and I was the I get what I want, and I want it now."

    That soon changed after Kaela and Daniel Deslatte tied the knot and wanted to start a family.

"You think differently about the choices you make, it's not as much about instant gratification."

 The couple  decided to buckle down and knock out debt, like college loans.
It's about looking at that debt and paying off that debt using cash instead of credit cards.

That principle learned from a Dave Ramsey money management course they took together.

One of their first steps was to budget their expenses.

 "And it's hard you know if you've never done a budget before and you've never spent that way and you're used to just spending as it comes, it is a change in your behavior and takes some time to get used to."

 And that's just the beginning.

Check out this envelope system.

 "Restaurant has a separate envelope from us than groceries."

The way it works is the delattes divide their money into categories, allotting only a certain amount for each.

 "So if you have a grocery envelope, when that envelope runs out you've got to do freezer meals or whatever.Gotta make it work."

 They say it has saved them so much money when Kaela got a new car they were able to pay it off in a matter of months.

 "People in their minds I think have this idea that it's so hard to do and we'll never get there and we'll be like this forever, and the truth is that's really not the truth."

  But for people who are admittedly shop-aholics, there can be setbacks.
"Clothing is a need, is the 40th pair of shoes a need? you'll probably say what kind of shoes are they? But the joke is you don't need all of that."

 At consumer credit counseling services, the average client is $28,000  in the hole.

 "We always see people that kind of extended their shopping power, their buying power because power equals love in their minds."

  So CCCS staffers, like todd mark, help you list your priorities-- and determine what you can do without.

 "People are always terrified when they come to CCCS are we going to tell them oh you need to cut your cable or stop drinking Starbucks? And the answer is it's all going to depend on what your income allows."

What you don't want a dose of... Is what's called "minimum payment syndrome."

 "The vast majority of payment is going toward interest and you're not making any head way."

The delattes have had so much success with their new finance principles... They're teaching the course at a church now.

Here are a few baby steps to get you started:
- 1,000 to put in an emergency fund
- second, pay off all of your debt starting with the smallest debt first.
- and third, put 3 to 6 months of expenses in savings.

    Last year... Eight of the Delatte's students paid off a total of $30,000 in debt, over a 13-week period.
    Now they have the freedom to do things like buy that pair of shoes... Cash... Because they can.

    If your debt has become  overwhelming CCCS, and other programs, can work with your creditors on your behalf.

Ideally when you get your head above water, you only want to charge what you can pay on time and in full every month.
     Consumer credit counseling is a non-profit organization... So all of it's services are free.
 If you'd like more information on credit counseling, click on the Hot Button and search under Monday.


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