The total amount of outstanding debt for consumers in the United States is $3.4 trillion, and the average American household has $5,700 in debt. If you are in debt and having a hard time getting out of it, you need to hire a financial advisor. Even though hiring this professional will cost you money, it still pays off in the long run. Below is some more information about this so you can get started on the road to debt freedom.
Create a Budget
One of the first things a financial advisor will do for you is to help you create a budget. The advisor will likely ask you to track everything you spend for several months to see where your money is going. This also shows you where you can cut your spending. For example, you may be astonished at how much you are spending on fast food or stopping by gas stations to pick up sodas. All of this can quickly add up over time and is a complete waste of money.
Once the financial advisor sees where your money is going, they will sit down with you and develop a budget. Because they know where you are spending most of your money, they will set up categories to set a spending limit in these areas. Make sure you bring all your bills with you so they can see how much everything is, as well as your financial statements, such as paycheck stubs.
Consolidate Debt
Your financial advisor may suggest that you consolidate your debts. This would result in one payment instead of making several payments to companies. This will make things much easier for you. For example, the advisor would help you find a lender to give you an unsecured loan that would combine your credit card debt. The interest rate on the unsecured loan may even be lower when compared to the interest rates on your credit cards.
Maximize Earnings
The financial advisor can also look at your current investments and income and help you with different ways to maximize your earnings. When you first started your current job, you may have told your company to take too much tax out of your paychecks. Even though this will result in a bigger refund during tax time, you should keep this money for yourself throughout the year to pay off debt. Talk with your employer about adjusting your withholdings.
Talk with a financial advisor in your area to learn many more ways they can help you.
