Money Matters: Dealing with debtPosted: Updated:
PHOENIX -- Rising prices and falling incomes have forced millions of Americans to borrow money.
More people than ever before are dealing with debt.
It was last year when Ken Lewis finally realized he had a problem, a problem many Valley residents don't want to admit.
"It was embarrassing to talk about it," Lewis said. "It's not something I bring up in conversation with people."
In fact, Lewis only admitted it to himself when he realized he didn't like checking his mailbox anymore. It was like walking to the mailbox stressed him out.
"Shallow breathing and a sense of feeling like, 'How am I going to handle it?" Lewis said.
Handle what? Well, how about seven different credit card statements that Lewis received each and every month with a total balance due of $42,000.
"Even close family members and friends who knew me didn't realize I had such a burden," he said.
Lewis' $42,000 credit card debt may be extreme, but he decided to tackle his situation head-on and with the economy tightening up, maybe you should, too.
"I guess the turning point was to say, 'You know what? I've got to do something because I cannot continue to live with my blood pressure going up," Lewis said.
So, consider examining your finances and realize how much debt you have. If the amount scares you, then cut expenses and look at your spending habits.
That's what Lewis did.
"When I have a knee-jerk reaction to go ahead and buy something, that's a red flag to say you know, you better look at that just a moment," he said.
Immediately stop using credit cards and carry cash to pay for things.
"It's like I have a sense of emotion now," Lewis said. "I get my money out and I say, 'That's my money."
Set up a household budget and don't go over it.
In other words, quit living like a rock star if you're not Bon Jovi.
"I think it's a great idea to have some kind of a budget and realize you don't want to go beyond your means," Lewis said. "Try to live under your means."
When it comes to items you have to have to survive, look around for a deal, even on groceries.
"I'll go to discount stores to buy my food," Lewis said. "I will use coupons."
Finally, if your financial situation is out of hand, you may want to consider professional help.
Lewis hired a Phoenix company called Take Charge America. The company helped cut his credit card interest rates from 24 percent to 7 percent and put him on a payment plan to start chipping away at his debt.
In fact, Lewis' $42,000 credit card debt is down to around $30,000 in just a year's time.
"There's light at the end of the tunnel," Lewis said. "In three and a half years, I will be completely debt free of credit cards."
And already Lewis says that stressful walk to the mailbox is a lot better than it used to be knowing his debt is decreasing month after month.
"Each time I walk to the mailbox now, I have a sense of joy thinking, 'I wonder how far it's come down now," he said.