Your own personal debt ceiling and how you can avoid a debt crisis

CLEVELAND - Many people feel congress did not handle the national debt ceiling very well.  But financial experts say what happened in Washington should be a wake-up call for you to examine your own personal debt ceiling. We have important advice to keep in mind.

Donna Smith knows how important it is to pay attention to the prices at the pump and expenses in the home. Donna was paying with cash at a station in Lakewood.  She was not using a credit card, which is something some people find themselves in trouble with.

"It seems these days everyone's in debt," said Smith. "Almost everyone. You're pretty much the norm," she added.

That personal debt can be chipped away if you have a strategy, said Jay Seaton from the non-profit group Apprisen, which is formerly known as Consumer Credit Counseling. Paying the minimum is not a good idea, he told us, but setting the card aside for a bit and paying the minimum plus $25 to $50 is a great start.

"You've got to get over that hump of thinking. 'I've got to have an extra $500 or $400,' because that's not going to be in the mattress," Seaton said. "That's not going to happen.  And you just go back and pay the minimum, which is not the best way to do it," he explained.

Seaton suggested paying off the higher interest rate cards first and mix in the smaller balances, too, to help with mental "wins" in the debt fight. Also, be prepared for your own unexpected financial "shutdown," like losing your job or big medical bills that come up. Establish a savings cushion for emergencies.

Plus, in helping to save you some money, Apprisen offers some advice for free over the phone and a free Debt Test worksheet on its website where you answer 13 questions like "Are you chronically late in paying your expenses?" or "Are you taking money from savings to pay current expenses?"

"If you answer yes to a couple of those…you're going to find yourself potentially where you want to reach out for help," said Seaton.

It's help that Donna said you shouldn't feel weird about asking for. "It's hard. You're out of work and these days it seems like it takes just a few months before you're into debt," she told us.

With that savings cushion Seaton was talking about, he said if you can just put away some money even in a low interest rate, it's better than not having something at all.


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