Financial Wellness 101: Reduce Debt One Slice at a Time
With the New Year comes New Year's Resolutions.
If one is trying to reduce debt, here are a few ideas.
ARE YOU REDUCING YOUR DEBT?
You’ve heard the phrase, “Slow and steady wins the race.” The same is true when it comes to reducing debt. Start with your smallest debt and then work on your larger debts.
If debt is a leading contributor to your overall stress, you’re not alone. The national average for household credit card debt is $6,194.1 The average total household debt, including mortgages, is $135,841.1 That volume of debt can be a real burden on your wallet, relationships and ability to achieve other important goals like saving for retirement.
TRY THE DEBT SNOWBALL METHOD
Step 1: List your debts from smallest to largest.
Step 2: Make minimum payments on all your debts except the smallest.
Step 3: Pay as much as possible on your smallest debt.
Step 4: Repeat until each debt is paid in full.
Eliminating your smallest debt first and gaining momentum as each balance is paid off is the key to becoming debt-free. Soon, the second debt will follow, then the next, and repeat until you’re debt-free. Stick to the plan and begin leading a healthy progression toward reducing your debt.
For more information on financial wellness, contact our retirement financial professional Scott Higgins at 269-552-3200 or shiggins@rosestreetadvisors.com.
¹Experian 2019 Consumer Debt Study. March 9, 2020
Securities and Investment Advisory Services Offered Through M Holdings Securities, Inc., a Registered Broker/Dealer and Investment Adviser, Member FINRA/SIPC. Rose Street Advisors is independently owned and operated. Investor Disclosures: https://bit.ly/KF-Disclosures ACR# 4695358 04/22
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Scott Higgins
AIF®, CFP®, CPFA® | Financial Advisor
Since 2012 at Rose Street, Scott has been responsible for helping the firm’s individual wealth management clients with income strategies for retirement and consulting with employers with their employee retirement plans. In free time, he enjoys golf, biking, skiing, cooking, and traveling. Fun fact, Scott has a hobby of filling growlers with coins!
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