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Frugal Friday Money News: Federal Debt Surpasses $16 trillion

by on September 7, 2012

The Treasury Department announced yesterday that the federal government has officially surpassed $16 trillion in debt. If this unfathomable number were divided up by the number of U.S. citizens, it would cost each of us about $50,000. Yikes! That is a lot of money and doesn’t even include our own personal debt (credit, student loan, mortgage, etc.).

Besides voting for public officials, what can individuals really do about the outrageous debt levels that America has incurred? Unfortunately, we can’t do much. Rather than complaining about our deficit, lets focus on our individual net worth and how we can reduce our own personal debt.

Below are 4 awesome tips that can help you reduce your own debt and become a more financially stable person!

1. Pay off your credit card debt – Credit card debt can be a burden on your psychy but it doesn’t have to! Examine all your credit lines, the interest rates you are being charged and then figure out how much you can pay on them per month to see how long it will take you to fully pay them off. Once you start paying down your credit card debt, your credit rating will improve and you will get access to better rates on future loans. Also, after you are done paying off debt, you can reroute that money to go into a savings fund.

2. Don’t take our payday loans – These loans are very dangerous for your budget because they cost up to 30 percent to take out. No other loan or line or credit costs that much to borrow. Also, getting a payday loan could potentially damage your credit score and leave you in an even worse financial situation than you originally started off in.

3. Make a budget – You cannot fully pay off your debt and improve your finances if you don’t know how much you earn, spend and save each month. By creating a budget with PowerWallet, a free online money management tool, you can get a real-time picture of your current financial situation and then improve your debt problems.

4. Reach out to a profession for help – After carefully evaluating your budget and getting a realistic picture of your current financial situation, you may feel overwhelmed and unsure of how to proactively conquer your debt. Reach out to a professional credit counseling agency to see your options and help reduce the interest rates on your credit cards. A certified credit counseling agency can help you pay off your debt in less than five years, can consolidate all of your debt payments into one low monthly payment and can

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