Beech Tree News Network

With last weekend’s emphasis on shopping, many of us felt we should be looking for bargains. But, this year my gift giving is based on a list and a budget. I’m using Christmas club funds to avoid January debt. I’ve been doing this for years, but haven’t always been as strict with myself.

I read Dave Ramsey’s article, “Dave says,” each Wednesday in the Bowling Green Daily News. Many of you know that Mr. Ramsey advises against using credit cards (His “Baby Step 2” is paying off all consumer debt from smallest to largest using the debt snowball.). Mr. Ramsey’s advice is very practical, but sometimes difficult to follow totally.

In an article, “American Household Credit Card Debt Statistics: 2015” (http://https://money.com/credit-card-debt-study-pandemic-2020/), Tim Chen reported the following average U.S. household consumer debt (as of October 2015 for those who have debt):
•    Average credit card debt: $16,140
•    Average mortgage debt: $155,361
•    Average student loan debt: $31,946
Another article, “Credit Card Debt Statistics” on CreditCards.com (http://www.creditcards.com/credit-card-news/credit-card-debt-statistics-... by Tamara E. Holmes and Yasmin Ghahremani; updated in April 2015), described two kinds of credit card users:
•    Transactors are those who use their cards for purchases and pay off the balances each month. The balances on their cards aren't really debts, since purchases are paid off before interest charges are applied.
•    Revolvers are those who carry balances on their cards, paying interest charges month to month.
The authors explained that the number of revolvers has been decreasing steadily since 2009. In 2014, only 34% reported their household carrying credit card debt from month to month, down from 44 percent in 2009. So, Americans are moving in the right direction.

GuideStone Magazine, a publication from GuideStone Financial Resources, included an article about debt in 2012. To get rid of debt, the article advised that a person: analyze the source of the debt, make a list of what is owed, stop taking on more debt, prioritize and budget, but not neglect other financial responsibilities in the process (i.e., tithing, investing for retirement). A helpful online budgeting tool is Credit.com’s Credit Card Payoff Calculator (https://www.credit.com/tools/credit-card-payoff-calculator/). Much like a mortgage calculator, this calculator allows a person to enter the balance owed, the interest rate and a monthly payment, then it calculates how long it will take to pay off the debt at that rate of payment. By changing the monthly payment amount, one can watch the repayment time go up or down.

Dave Ramsey said, “There are no shortcuts when it comes to getting out of debt” (http://www.brainyquote.com/quotes/keywords/debt_3.html). I agree. Hopefully, my list and budget will prevent unplanned Christmas debt…. Happy shopping!