3OYS: Debt load in Phoenix grows; what you should knowPosted: Updated:
PHOENIX -- There's no doubt that we are a nation of debt. The average credit card debt is $15K, and the average student loan debt is $33K. With that kind of debt, how can people dig their way out?
One Valley couple asked themselves that same question. And now, they have hope.
Shayne and Bianca Lopez recently married. And like many newlyweds, they want to be in control of their finances.
“Well, I guess the biggest financial goal is to be debt-free eventually," Shayne tells 3TV.
And although that's their goal, they also understand it might be tough to achieve, particularly since they owe so much money: $75K.
According to a recent report put out by Experian, the couple's debt load is above average. In fact, in Phoenix, the average debt load is just above $27K per person.
“It's part of the American way almost. Having debt is something that is very common for most Americans," says Joe Gleason, a financial adviser who agreed to sit down with the couple at our request.
He says while they may feel like they are drowning in debt, there is a way out.
“A big part of that is being reasonable and being mindful of what the situation is," he says.
Joe says the first thing Shayne and Bianca need to do is start acknowledging and being aware of their debt load and start cutting back.
To do that, Joe suggested establishing a manageable plan and a budget, then following it.
”If you've got a smaller balance on a card, and a lot of times those might be the department stores or something like that, pay that off," Joe says.
Next, Joe says the couple should also cut out all the little extras in their lives, like cable packages, home phones not in use, and paying for extra entertainment.
“One of the big ones that we see is going out to lunch every day," Joe says. "And the $8 here, the $12 there, and then $15; it really starts adding up. And that's an easy one to get rid of right off the bat.”
For Shayne and Bianca, sitting down actually visualizing and writing down a budget has been a huge step toward financial freedom.
“I think a sense of relief just because it'll give us, like, a direction," Shayne says.
But, it's not just one big step in that direction instead, Joe says to consider baby steps, which, when taken one after the other, will get the couple out of debt."
“Really, it always boils down to live within your means," he says.
“Debt's kind of, it's kind of like an illness or like a cancer. And if, like, if you don't get treatment, it's going to grow out of control,” says Shayne.
Approximately half of the Lopezes' debt was student loan debt.
Joe says while getting loans for education can be good, it's important to be cautious with how many loans you take out, and making concessions, like perhaps attending a community college first.