Household debt rose to a record-breaking $14.6 trillion during 2020, the first year of the pandemic. There were many reasons for this record, including consumers relying on their credit cards to live on after a job loss. But the main contributors were student debt and mortgage debt. Student debt only showed a small rise because of forbearance programs, but mortgage debt rose a staggering $10 trillion.
If you were one of the consumers who had to rely on their credit cards to make it through 2020, perhaps to make up for the shortfall in your income after an unexpected job loss, there’s good news. Effective household debt management plans are available to pay off your debt completely this year. Besides paying off your debt completely this year, you could also improve your financial situation by learning how to invest your income and make it grow.
Tip #1: Restructure Your Debt
We live in a society where debt is almost inevitable because of the discrepancy between income and the rising cost of living. Unfortunately, it’s easy for debt, especially credit card debt, to get out of control, resulting in difficulty keeping up with monthly payments. When this happens, high interest rates force household debt to grow at an astronomical rate.
One great tip for bringing down your credit card debt to a zero balance is to get a debt consolidation loan. This type of loan, of course, does not eliminate your debt but transfers it to another creditor at a lower interest rate to make it easier to pay.
By consolidating debt through a loan from a lender like Hawkeye Associates, almost all the stress you experienced paying down your credit cards disappears. Payments suddenly become manageable.
Tip#2: Learn to Trade Stocks
Unlike many other types of investments, learning how to trade stocks is something that you can do through self-study because there are plenty of online resources available to teach you how to trade stocks.
There are limited hours in the day for you to trade your time for dollars. As an investor, you will put your money to work for you and end up earning far more than through unstinting hard work alone.
Here are some suggestions on how to learn to trade from scratch:
- Open up a stock brokerage account to practice paper trading, a simple way to learn without risking any money. You will learn how to read technical indicators to understand how the market moves.
- Read recommended books and articles written by famous stock traders. These will give you an understanding of how successful investors think.
- Study the psychology of stock trading. How you feel about buying and selling stocks plays a significant role in decision-making.
- Network with mentors and fellow students through social media channels and forums. You will learn from other people’s experiences and share your own.
- Follow the stock market to get a good grasp of how the market works. Read news outlets that provide extensive stock market coverage.
Initially, use these resources to learn at your own pace, then, at a more advanced stage, consider paid subscriptions, going to live online classes, taking online courses, and attending live seminars.
In conclusion, 2020 may have been a difficult year for you, but there are many ways of rebooting your household finances this year, including using consolidation loans to pay off your debt and learning how to invest in stocks to earn money to supplement what you earn from your job.
