Debt and Budgeting Discussion

DEBT AND BUDGETING DISCUSSION

Debt and BudgetingDiscussion

Debt and BudgetingDiscussion

In the article “Til Debt Do Us Apart,” Gail Vaz-Oxlade, arenowned financial columnist, takes a tough-love approach to gettingcouples in the financial crisis to face reality (CNBC, 2009). Gailexplains ten guidelines to avoid financial crisis owing to debts.Firstly, she recommends that couples should cut their credit cardsand set a budget. They should prepare a budget and keep a record ofthe expenses that matches the estimated budget. Indeed, in the video,the couple suffers from extravagant expenses, which constrain theirincome. Secondly, couples should reduce their interest rates as a wayto fast track out debts. For instance, some partners have interestrates as high as 30 % such that when they pay their monthly minimum,all they do is paying off interest rather than chipping away at theprincipal. Therefore, couples should call and negotiate for lowinterests rates with their creditors.

Thirdly, couples should earn extra money by ensuring that they engagein additional activities such as web designing and overtime workamong others to cater for their debt. Fourth, getting prioritiesstraight is a powerful solution to family debts. Indeed, partnersshould make a list of the most necessary things and discussthoroughly among themselves to come up with the best decisionsconcerning the family (CNBC, 2009). Additionally, couples should chipaway at the debt by making a list of every single debt, rank them inorder of the highest interest rates, and pay off the highest interestrate card first. Further, they should keep things in perspective bymaking sacrifices that neither harm their relationship nor escalatestheir debts.

In addition, Gail claims that getting out of debt does not meanpartners cannot ever spend again. In effect, they just need to planand save for the most important things while working away out oftheir debts. Importantly, couples should cease from eating out andother pleasures. For instance, in the video, the couple spentapproximately $1804.63 on a vocation that is half the couple’sincome. In fact, having a family dinner at home cuts costs more thanout dinner parties. She also argues that proper organization ensureseasy and convenient access to the debt documents (CNBC, 2009).Therefore, it helps couples to pay down debts with ease since theyare in control. Finally, partners should be willing to part withtoys. They ought to take courage and sacrifice the things they adoreprovided they do it to avoid a financial crisis.

Reference

CNBC. (2009). Til Debt Do Us Part. Retrieved March 17, 2016, fromhttp://www.cnbc.com/2009/11/06/10-Tips-to-Get-Out-of-Debt.html