USAinDebt

US household debt reached the whooping $12,817.2 billion by the end of last year - a constantly growing combination of consumer credit ($2,430.8 billion) and mortgage debt ($9,704.7 billion). The numbers are steadily increasing since 1966, becoming a major problem for millions of Americans. For the year of 2006, per-household debt liability is estimated at $510678.(1)

Most individuals & families have combined debt from several sources: PayDay Loans (PDL), Credit Cards, Department Store Cards, Personal Loans, Student Loans, Credit Union Loans, Auto Loans & Mortgage. Taxes and Medical Bills are also accounted as a major percentage of what’s currently owed.

If you are stuck in debt, you will have to take the first step yourself. You can’t really expect much help from your creditors and it is unlikely for them to try to ease on your situation. Here’s the first couple of things that you can do to get started:

Open up Excel and create a new file, than save it. It is a good idea to protect it with a lengthy password (read how to do that here). Collect all your credit cards, store cards, loans & mortgage documents.

Write down the name of each one of your creditors in the first column. Your second column will contain your balance (what you owe). Your third column is for the minimum monthly payment, the forth column is for the APR and the last column is your available funds. Call up each one of your creditors and get the exact numbers, then fill out the boxes. After you have all the information, you can use Excel’s “autosum” to automatically calculate for you. Work with one column at a time. Select the first number in that column by clicking it with the left button on your mouse. Hold the button than drag the mouse down, selecting all the numbers in the column. Continue dragging until the mouse is 2-3 empty fields below the last number in the column. Release the left key, and on the toolbar above click on the “Σ” key. It will automatically sum the numbers in the column at the bottom. Do the same for the minimum payment & available funds columns.

Now you can add some more info to your file. This time create a column, listing your monthly expenses-rent, insurance, car, food etc etc. Write every single thing down, including the total from the minimum monthly payments column, and then sum it. Also write down your what your earnings are per month.You now have a table, which clearly shows your total debt, how much that debt costs you per month and how much money you have available. It will give you a good view of your monthly expenses, which hopefully are less than what you are earning from your job.Next issue: Cutting down your costs

(1) Data by US Federal Reserve

(2) More debt statistics by CreditCards.com

Tags: credit | getting out of debt | debt-free | payday loans | personal loans | student loans | mortgage