This monthly column comes from the Arlington Community Federal Credit Union as part of their mission to financially empower the community. Credit unions are not-for-profit member-owned cooperatives and anyone who lives, works, worships, volunteers, goes to school, or does business in Arlington, Falls Church, Alexandria, or Fairfax County is eligible to join ACFCU.*
During this challenging time for our community, many have taken on debt to support themselves and their family. Here are tips for managing and paying down debt:
- Understand your household expenses: Make a list of your fixed expenses such as rent or mortgage, utilities and loan payments. Add the due dates to your calendar to pay on time and set up autopay options when possible.
- Prioritize your debts: Make at least the minimum payments on all of your debts. Use any extra funds to pay down debts with the highest interest rate (usually credit cards). Every little bit makes a difference and will help you save money on interest.
- Set spending limits: It’s easy to overspend when you don’t set boundaries. Once you’re clear on how much is coming in and going out, set spending limits.
- Put your credit cards away: Sometimes, the key to preventing excessive debt is making it difficult to use your credit cards. Consider locking away your highest interest credit cards and moving a debit card or lower interest credit card to the top of your wallet.
- Shop for the best rates: Compare rates both when you are taking on and managing debt. Look for lower interest options and ask your financial institution to match the lower rate offered to you. You can also explore refinancing high interest debt.
- Build up your emergency savings account: Build your emergency savings account with a goal of saving three to six months’ worth of expenses. Having a savings buffer will reduce your need to take on additional debt later.
We are proud to be part of this resilient community. As Arlington’s credit union, we support our members throughout their financial journey and are here to support our neighbors as they explore options for financial success.
*Membership eligibility requirements apply. Federally insured by NCUA.
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