It seems everyone is talking about debts these days.
Consumer debts.
Government debts.
Business debts.
Our nation's debt problem has reached crisis level, creating economic chaos that hasn't been witnessed since the Great Depression.
According to MSN Money, Americans owe more than $2 trillion in creditor debts and that figure doesn't include outstanding mortgage notes.
This averages out to approximately $20,000 of debt per U.
S.
citizen.
While we aren't in a position to fix government or business debts, it is essential for each of us to work on eliminating our own personal debts.
Debts have a way of quickly accumulating.
If you're like the average American, you probably have a mortgage, second mortgage, automobile loan, student loan, and credit cards.
Before you realize it, credit card bills and personal loans take over and eradicate your savings account.
Part of America's debt problem is consumers have become addicted to credit.
Many people have ten to fifteen credit cards with varying credit limits.
They use credit cards to pay for daily living expenses including their morning coffee and fast food lunch.
When credit card bills arrive, a large percentage of Americans pay the minimum amount due.
As each month goes by, interest accrues and continuously increases their level of debt.
High interest rates, late fees and over-the-limit charges can quickly add up to several hundred dollars in additional debt each year.
If you are tired of being a slave to debts, it is time to become proactive and develop a get-out-of-debt plan.
The first step requires thorough review of your finances.
Create a list of income and expenses.
If your expenses are higher than your income, you are going to have to determine how to generate more income or how to reduce expenses.
Most people don't realize just how much money they are spending.
A simple, yet effective trick for tracking expenses is to carry a small notepad and record every penny spent.
You might be surprised to see how quickly a pack of gum, bottle of soda, tank of gas, and morning latte add up.
There are several options for eliminating debts.
Budgeting is a simple way to regain control of your finances.
Although budgeting requires self-discipline, it doesn't cost a dime and you don't have to relinquish control of your finances to accomplish your goals.
If you aren't able to manage money on your own, consider engaging in credit counseling.
Many non-profit agencies utilize a sliding scale to determine fees.
Depending on your circumstances, you might be entitled to free credit counseling.
Check with the US Trustee Program to locate credit counselors and debt education programs offered through the Department of Justice.
Debt consolidation is an alternative for homeowners.
Most debt consolidation loans are home equity loans and require homeowners to have sufficient equity in their property.
Using the equity as collateral, a second mortgage is provided to pay off unsecured loans such as credit card debt or personal loans.
With the current credit crisis, debt consolidation loans are considerably more difficult to obtain.
Additionally, they could potentially place your home at risk for foreclosure.
If you are unable to make payments on the second mortgage, the lender can initiate foreclosure proceedings even if you are current on the first mortgage note.
If you are drowning in debts, take time to become educated about the various debt reduction plans.
Instead of perceiving debt reduction as an insurmountable challenge, think of it as a money game.
Find ways to reduce spending such as buying in bulk, shopping at yard sales or thrift shops, or clipping coupons.
Then use the savings to pay off debts.
With patience and practice you can become the master of your money game.
By eradicating debts now, you can secure your future and ensure you can live comfortable when it is time to retire.