Debt in America is on the rise. Total median household debt rose from $86,600 in 2001 to $108,000 in 2011 after adjustment for inflation, according to a recent report issued by the US Census Bureau. Even worse, unsecured debt – credit cards, loans and so on – rose by over 30% during the decade. More and more American families are experiencing severe debt issues, leading to financial difficulties and high stress levels.


If you are unfortunate enough to find yourself in this position, then there is no point in blaming yourself or giving up. Instead, you have to take positive actions to get your debt under control, and you need to resolve to change things so that you will never get back in this situation again.

When it comes to getting debt under control, there are three basic strategies that you can use. The first of these is to reduce the amount that you spend on a monthly basis. The second is to increase your income – for example, working a second job or taking up more lucrative employment. The third is to reduce the amount it costs you to service your existing debt. If you make a serious attempt to do all three of these, you will free up money to start to pay down your debt and get yourself back on a stable financial footing.

Reducing your monthly expenses isn’t always easy, and you will have to make some sacrifices. However, before you do anything, you need to put together a budget that lists all of your outgoings. This needs to be comprehensive – don’t just include your rent, mortgage, grocery, transportation and utility bills. You would be surprised just how much you spend on the little things – grabbing a bite to eat while you are out, having that cup of coffee, or paying for various forms of entertainment.

Once you have a complete list, strike out all of the things that you know you can do without – for instance, if you go to the movie theater a couple of times a month, then you are going to need to give this up. Also think about whether you could get by with less services. Do you really need that full cable channel lineup, or could you survive with the basic option? Once you have identified everything that you can possibly cut, what remains is the budget you need to follow each month. However, if you live like a complete hermit, the chances are you won’t stick to your budget. So, add a small allowance that you can spend on anything you want – you’ll be surprised how much you enjoy the little luxuries when they are special.

When it comes to raising your income, the good news – sort of – is that if you have put yourself on a strict budget, you are likely to have more time on your hands. Consider looking for a part-time job, or even doing some work online – for instance, if you have salable office skills, you may be able to find additional work on freelancing sites such as Elance. Also, think about asking your boss for a raise – just make sure that this isn’t likely to get you fired, since you don’t want to make the situation worse. Finally, you may even want to consider a career change if you do not feel you have sufficient earning potential in your current job. For example, you could think about moving into an area such as financial services – take a look at the Fisher Careers blog if this interests you.


Finally, you can also consolidate your existing debts. A good place to start is to set up a session with a reputable debt counselor. They can help you to find financing options to reduce your debt payments – for example, they may be able to find a longer-term loan that you can use to pay off your existing debts. This will have the effect of reducing your monthly payments, although it is possible that you may end up paying somewhat more in total over the long term. They may also be able to help you negotiate an agreement with your creditors, so that you pay lower interest rates and smaller monthly payments. If you do this, not only will you stop the constant final demands and visits from debt collectors, you may also be able to avoid bankruptcy – which has significant long-term implications both for your finances and for employment. However, you should note that if the debt counselor does negotiate an agreement with your creditors, your credit rating could be affected.