LOCAL NEWS
How to dig out of debt
Apr 20, 2023, 11:04 AM | Updated: 12:48 pm
SALT LAKE CITY — How much debt is too much debt?
In today’s “Save more, worry less,” KSL’s Tamara Vaifanua breaks down the signs of out-of-control debt, according to CNBC.
- You can’t save for an emergency fund.
- Financial planners usually recommend putting away enough money to cover three to six months of expenses.
- You can only afford to make the minimum debt payments.
- You’re denied for new credit which means your credit score is too low.
- You’re opening new credit card accounts to help pay for older ones.
- You’re consistently late paying bills because you can’t afford them.
- Your debt-to-income ratio is above 36%.
So, how can you start digging out of debt? Financial planners say it comes down to decreasing discretionary income or increasing income.
First, create a list of your expenses. Look for areas you can cut or eliminate.
Another option is to ask lenders or credit card providers if they can work with you based on hardship — request a forbearance, reduce interest rates, or waive fees.
There are also credit counseling organizations that can put you on a plan to consolidate your debt and make a single, lower payment for all your debt.
As a last resort, talk to a financial planner if declaring bankruptcy makes the most sense.