Let’s face it, debt in the United States is a problem. From our national debt, student loan debt, and consumer debt. Debt in the United States is a problem on all levels. Why is that?

I’m a firm believer that it starts with the lack of education on the topic. Only 17 states require high school students to take a course in personal finance. But even those states that teach financial literacy, debt is still a problem.

Maybe it the YOLO or living my best life mentality that leads to our obsession with overspending. Perhaps it’s the instant gratification we seek and hit the “like” button on social media every day. Or that fact that we let 17 and 18-year-olds make their biggest financial decision (college) with little guidance or the impact of taking on student loan debt could have on them for years to come.

Or maybe it’s the lead by example trap that has gotten debt in the United States out of control. We are just merely following the herd. Heck, our government is 22 trillion in the red.

Whatever the reason is for it, we need to take back control of the debt in the United States. The sooner we can start, the better. Let’s dig in on some of the debt categories and why we’ve fallen off the debt wagon.

National Debt In The United States

Pop quiz. Do you know the last year the United States didn’t have any Government Debt?

Way back in January 1835, America owed no interest-bearing debt for the only time in its history. By the end of that year, the national debt in the United States had fallen to only $33,700, or less than $1 million in 2019 dollars. The U.S. Treasury’s published records go back to 1790, but U.S. debt began before that date with the Revolutionary War.

Since 1835, the debt in the United States has fluctuated, but overall, it has increased. Hitting the billion-dollar mark for the first time in 1863, and the trillion-dollar mark in 1982.

The U.S. government’s public debt now stands at more than $22 trillion. In less than 30-years, we have more than twenty-two times more debt. It looks as if there’s no slowing down either. National Debt in the United States is expected to grow an average of $1.2 trillion over the next ten years. The growth occurs when Congress spends more than it takes in through tax revenues, and I wonder why the American people have a problem with debt.

National Debt Stats

• By 2029 National debt is estimated to reach $28.7 trillion
• The National debt equals $69,140 for every person living in the U.S.
• The National debt is now bigger than our gross domestic product
• The National debt equals $178,691 for every household in the U.S

Consumer Debt In The United States

Well, American people are almost as bad as our leadership.

Consumer debt, which is classified as credit cards, mortgages, auto loans, payday loans, and student loans, totals $13.5 trillion. Ouch! Let’s leave out student loans for now. It deserves its own discussion.

Often when discussing consumer debt, the concept of good debt verse bad debt comes up. Typically a good debt is something that has a future value. Bad debt would be something that is not needed immediately or could cost you more over time. A mortgage, for example, is often considered good debt.

A home is not something most individuals could afford to pay in full upfront. A mortgage is required to make the purchase, and typically real estate with appreciate over time. The home also provides a place to live while paying it off. It finally can be sold to pay off the mortgage. The goal of real estate investing should be to build equity.

On the flip side, credit card purchases that are not paid in full each month are considered bad debt. For example, if you use a credit card to buy a new television, but fail to pay for it in full with a month, interest is accrued. The TV now is costing more then it’s original purchase price, because of the interest charged by the credit company each month.

At the end of 2018, total credit-card debt in the United States reached $829-billion. Now consider a 10% interest rate on that total, and we are paying $82.9-billion in interest a month. Someone is getting rich off our inability to live within our means.

Reviewing my home state of New York, here are the debt totals:

• Credit card debt average: $6,800 ($700 less than the national average)
• Mortgage debt: $34,000 (the average among all residents with a credit history)
• Bankruptcy: Highest numbers of filings – 107,480 in 2015
• Credit Scores: New York state consumers rank better than the national average of 675
• Payday Loans: Illegal in N.Y., because of the high-interest rates and short repayment period.

No one state is immune to the debt crisis. Some are just better at it than others. Debt in the United States doesn’t discriminate based on age. Debt is found in those 35 years and younger, all the way to those 75 and older. The 45-54 age group carries the most average debt at $134,600.

It’s crystal clear with love living beyond our means.

Student Loan Debt In The United States

In the last twenty years, outstanding student loan debt has more than doubled, from $49-billion in 1998 to over $1.4-trillion in 2018.

The federal government assumed control of the student-loan program in 2010, replacing the previous administrator Sallie Mae. This move helped cut costs and made the availability of education assistance easier. The fact that interest rates were lowered to encourage higher education has led to increased borrowing.

On average, about two in three (65 percent) college seniors who graduated from public and private nonprofit colleges in 2018 had student loan debt. These borrowers owed an average of $29,200, a two percent increase from the 2017 average.

Snapshot of Connecticut’s student debt totals:

• Has the highest Student debt average – $38,650
• 59% of College students have debt
• CT students carry a total of $17 billion in student loan debt

Why in the world are we allowing 17-18-year-olds to make this type of significant financial decision? I’m sure it boils down to the fact that someone is making money off it. Many would agree that higher education is good debt, but if you make a decision to attend a college based on the prettiness of the campus, or without researching the potential job market when you graduate, you are making an uneducated decision.

Students, parents, guidance counselors, and college admission offices all play a part in the explosion of student loan debt in the United States. We need to do a better job of preparing our youth for the traps of debt.

We need to make sure they understand that the goal is to graduate with as little debt as possible. Sure we want our kids to enjoy their college experience, but we don’t want them to live it up for four years and struggle for the next 20 years trying to pay back their loans.

We need to do better for our young adults.

How To Fix Our Debt Problem

It’s a simple solution. We need to stop spending more than we make. That solution is easier said than done. There are many factors to managing our money. Behavior and habits play the biggest factors. The math of balancing your finances is fifth-grade math. But those unexpected life events could care less about that math.

The psychological effects of debt can be crippling, stress, worry, and fear. Not to mention the relationships and partnership, it can destroy and fights it can cause.

Would it be great to reduce these emotions about money in people’s lives?

The idea that the American dream is dead is false. Achieving that dream has just shifted. The world is a lot different than they were 100-years ago. 100-years ago, credit cards didn’t exist, and it was a lot harder to spend and borrow more then you make. The United States is still a land of opportunity, and it’s available to anyone. There are just a few more pitfalls to navigate today.

It boils down to teaching the basics of money management to everyone as early as possible and prioritizing how we use our money. We use money our entire lives. It’s an essential life skill that parents and teachers need to pass along to our youth.

Improved money education doesn’t simply fix everything. Just because you’re educated on a topic doesn’t mean your excel at it. But having the background knowledge doesn’t hurt, and it gives you the foundation you need. Your motivation to take advantage of it is still up to you.

I doubt we’ll fix the trillion-dollar National and consumer debt in the United States overnight, just by providing an increase in education. But imagine a world where students begin to learn about money in elementary school and continue that education through high school. When faced with their first big money decisions, like the cost of college, I’m sure we’ll see improvement.

1.Don’t Rush ItMcDonald wasn’t one of the biggest fast food restaurants in their first years, apple started in Steve Job’s Father’s Garage, many people you might not know started their online business from nothing but a laptop and creativity, but more than anything else, they needed patience. Have in mind the pros of starting from a small business, you will learn everything you need to know about a successful business from the basics. Some business do become successful in short time whether it is based on chance or fate. But majority takes time and a lot of patience to develop and expand. So do not rush no matter how desperate your situation is, it is important to be strategic!
2.Play It SmartOne of the downsides of not having funding is the lack of resources you will have, in this scenarios you need to be smart and take advantage of everything you got. Be resourceful as possible, every usable resources you have in your house whether it is computer, pen or even paper! You wont need to spend on what you already have in your home. Also utilize every favor or help you can get from friends and relatives. Maybe you know someone who are having some success in a similar business area you are interested in, take advantage, become their student. To sum it all up, you need to take advantage of everything that is within your reach.
3.Use the InternetWe all know the internet, but sometimes we forget everything we can find there. There are many free business resources you can use to form your business. Create a free blog or site with either blogger or wix. Maybe the result is not going to be whatever you have in mind as perfect for your business appeal online but you need to start somewhere. As your business grows and you get some funds you can hire a professional web designer or graphic designer. Also utilize search tools like google to find tons of useful information. You can also use social site like pinterest. Don’t be afraid of doing other things.
4. Earn MoneyWe have talked about some advice about what you need to start a business from nothing but… where should you start? Well, if you have internet connection and a computer it is not that hard to find sources of money that don’t need any kind of financial investment. Below are some ideas you make want to consider

• Surveys

I know, this is something you may already know. But on the internet we can find surveys you can do for money .There are many companies that need your opinion and are willing to pay for it. maybe you don’t like it but it is one way to earn some extra money you can invest in your business.

• Blogging

This is one of the best ways to start a business, and you know what? It is free and easy to do, all you need to do is post information you think people will find interesting or useful, many people is winning great amount of money by running blogs, of course maybe you don’t want to run a blog, remember this can be just a extra income for you and your main business. Have in mind that later on, you can use this blog as part of your business.

• Freelance Writing

You don’t really need to be a professional writer for this one; writing is something that will get better as you do it more and more, and believe me, there is a LOT of sites looking for people to write articles of any kind of subject for them. Sooner than later you will notice you’re earning a good amount of money from this.

• Translator

Of course, this is not something for everyone, you need to know other language so you can do this, but if this is the case, and you are able to speak in a second language, you will be surprised about all the money people pay so someone can translate something from one language to another.

• Online Or Offline Gigs

You can also do short tasks and gigs to earn extra money to invest in your business growth. Doing things like evaluating websites, driving your car with uber or lyft, transcribing, providing services on fiverr. You can also do gigs off line using apps such as taskrabbit etc. The list is endless when it comes to making some extra side money! Just think outside the box!
There are multitude of opportunities that will allow you to earn money. That money you can use to reinvest in your business! You do not need thousands or millions to start a business and have it grow. This will take time and patience and with most things invested time and energy!

Starting your own business is not easy, even if you have all the money in the world it is going to be difficult. The main thing you need to know is that giving up is not an option, don’t be intimidated by failure. With the tools we can find today on the internet.

Don’t fall for scams promising easy, overnight credit repair. If you want to fix your poor credit, you can (and should) do it yourself. Follow these six simple steps to do-it-yourself credit repair.

If you’ve had an overdue student loan, years of high credit card balances, collections accounts, or even a foreclosure, unfortunately, you probably have below-average or bad credit.

With poor credit, you may not be able to get approved for new credit products like credit cards. Although you may still be able to take out an auto loan or a mortgage, you’ll pay a much higher interest rate because of your low credit score. Compared to a borrower with good credit, someone with poor credit can pay $50,000 more in interest on a mortgage. Over an entire lifetime, you could end up paying over $200,000 more in unnecessary interest just because of bad credit.

The good news is—as you should know if you’ve read Money Under 30 for a while—that you can repair your credit score all on your own. It just requires a little bit of know-how and a good bit of patience. Here are six steps towards building better credit.

1. Figure out where you stand

Before you begin do-it-yourself credit repair, you’ll want to get copies of your full credit reports from all three bureaus (Experian, TransUnion, and Equifax).

You can get your reports truly free, once a year, at www.annualcreditreport.com or by calling 1-877-322-8228. Other websites may claim to offer free reports, but the Federal Trade Commission (FTC) warns that these offers are often deceptive.

You can also try free credit score tracking apps Credit Karma or Credit Sesame to get a sense of where you stand.

Credit scores range from 300 to 850. A score of between 700 and 740, depending on the scoring method used, is considered “good credit” and usually enough to qualify you for the best credit cards and lowest mortgage rates.

Related: How Credit Works: Understanding Your Report And Score

2. If you find errors, dispute them

The next step in credit repair is to dispute incorrect information on your credit report.

Errors aren’t common, but they happen. Of course, sometimes bad credit is just your fault. You shouldn’t try to argue accurate information, but if you do see errors–even small ones—it’s worth cleaning them up. Here’s how:

Once you have the copy of your full credit report in hand, check your identity information (Social Security number, spelling of your name and address), and credit history.

Review the list of credit cards, outstanding debts, and major purchases. If you see any mistakes or questionable items, make a copy of the report and highlight the error.

Next, gather any information that you have to back you up, such as bank account statements, and make copies of these as well. This is important! The credit bureaus won’t do anything without proof.

Write a letter to the specific credit reporting agency that shows the falsehood, whether it is Experian, Equifax, or TransUnion. Explain the mistake and include a copy of the highlighted report along with your documentation. Although certain bureaus now let you submit disputes online, it’s not a bad idea to send this letter by certified mail, and keep a copy for yourself. The reporting agency has 30 days from the receipt of your letter to respond. The Federal Trade Commission provides advice on contacting the credit bureaus about discrepancies. Here are the contact numbers and web sites for the three credit bureaus:

• Experian: 1-888-397-3742 – www.experian.com
• TransUnion: 1-800-916-8800 – www.transunion.com
• Equifax: 800-685-1111 – www.equifax.com

3. Stop the bleeding

Once you deal with any errors on your credit report, it’s time to ensure you’re not still spending more than you can afford each month.

Why is this so important? It’s because are only three simple things to do to repair bad credit:

1. Pay all of your bills on time
2. Pay down debt (especially credit card debt)
3. Avoid applying for credit

But before you can do these things, you need to make sure you’re not spending more than you earn—you need a budget.

To start, review your tax returns for the past two years to get a sense of how much money you actually take home in a year.

Subtract your regular monthly expenses (rent or mortgage, car payments, and home, car and health insurance) from your current income.

Next, estimate your monthly spending habits for other expenses such as gas, groceries and entertainment. Create a limit, based on your income, of what you can spend in each of the different categories of expenses. For example, if you tend to spend $400 a month on groceries, try to stick to $300 a month on groceries by making changes like buying generic brands, using coupons, and resisting impulse purchases.

4. Pay all bills on time going forward

If you want to fix bad credit, you need to start paying all of your monthly bills on time, period!

If you’re behind on any bill, get caught up as soon as you can. On-time payments are the single most important factor to your credit score. Simply put, your credit won’t improve until you can consistently pay every bill on time.

5. Pay down credit card balances

Take charge of your credit cards by paying down their balances.

If you have any outstanding balances, make room in your budget to pay down these debts bit by bit, every month until they are gone.

Know your credit limits and make every effort to stay well under the maximum when charging items.

That’s because credit bureaus analyze your debt load as a ratio. If you charge $500 on a card which has a $1,500 limit, you’ve used 33 percent, which is better for your credit score than charging the same amount on a card which has a $1,000 limit (50 percent), both of which are better than being maxed out (100 percent).

Related: Big Fat Guide to Getting Out of Debt

Pay these credit cards down, but don’t cancel them. The total amount of available credit affects your score, even if you owe nothing.

6. Don’t apply for new credit

Finally, resist the temptation to open a new credit card, even when a store offers a discount on your purchase for doing so.

Each time you apply for credit is listed on your credit report as a “hard inquiry” and if you have too many within two years, your credit score will suffer. In general, a consumer with good credit can apply for credit a few times each year before it begins to affect their credit score. If you’re already starting with below-average credit, however, these inquiries may have more of an impact on your score and delay your ultimate goal of watching your credit score climb.

When the dust settles, consider a unique way to build your credit like Self Lender.  Self Lender offers four different types of loans, each which you pay down monthly.  At the end of the term, Self Lender sends you back the initial term of the loan, minus interest and a small application fee.  Each month you make a payment, they’ll report to good behavior to the credit bureaus and you’re credit score and profile will likely improve.  The initial application may drop your credit score, but if you make all payments (to yourself) on-time, it should increase.

Experian Boost™ is another way for people with a poor or limited credit history to get ahead. Many times, these people will have a positive, consistent record of paying utilities on time, but those payments aren’t being included in their credit profile. Experian Boost™ allows people to include this payment history to their credit score. Best of all – it’s completely free.

Disclaimer – Results may vary. Some may not see improved scores or approval odds. Not all lenders use Experian credit files, and not all lenders use scores impacted by Experian Boost™.

Summary

Start by looking at your credit reports to get a sense of where you stand.

If you see any errors, dispute them with the credit bureaus. Then, focus on paying down any credit card debt while making every bill payment on time. In the meantime, do not apply for new credit. Basically, in order to repair your credit, you will need to limit your use of credit.

It may take months or even a couple of years for your credit score to improve, but if you plan on buying a new home, or taking on any other big debt, it’s well worth it.