The holiday bills will continue to flood mailboxes this month, presenting many consumers with proof that overspending can be difficult to resolve. Central Illinois Debt Management & Credit Education, Inc. (CIDMCE) urges consumers to look realistically at their debt loads and determine if they are too heavy.
CIDMCE advises consumers to ask themselves three questions to determine the health of their finances:
Can I only pay the minimum payment due on my credit card balances?
Consumers who regularly pay only the minimum amount due can add, in some cases, hundreds of dollars to purchases through interest alone. Paying late increases the chance of going over the limit on the card and can add additional penalty charges.
Do I have to use credit to buy necessities such as medicine or gasoline?
Consumers who find they are regularly charging routine expenses like groceries and gasoline may find themselves in serious trouble, especially if this is coupled with paying only minimum payments. This turns into a vicious cycle that is hard to break.
Would a decrease or even a brief interruption in my income cause immediate financial problems?
An emergency savings account is the best thing to have in case of a job loss or a cutback in wages or hours. However, if the answer to this question is yes, chances are an emergency savings cushion is not available. A decrease or interruption in income is made more serious if credit is being used regularly without a plan to pay in full.
If you answered yes to one or more of these questions, seek help now. Central Illinois Debt Management & Credit Education, Inc. is available to help you make a plan to pay off your debt, budget your available income to include necessities and can teach you how to build an emergency savings account. IBI