SPRINGFIELD, Mo. -- Business consultant Ellen Rohr is back on KOLR10 Daybreak with advice for something millions of Americans struggle with - paying off debt.
She talks with John Zeigler about the best ways to get a handle on your bills. "John, you are our debt expect, from what I understand," Rohr says.
"Yes, tons of student loans, got credit cards, got a house, and we're new into it," Zeigler admits.
"You and everybody else. The average person has $16,000 worth of credit card debt. It is crazy and it's easy," says Rohr. "Don't you get a credit everyday in the mail? It's like a ball and chain. You get chained to your debt and it can take you the rest of your life to pay it off. We're going to talk about confronting the debt. One is, make sure the whole family knows about it. And yes it is embarrassing sometimes, but have the tough conversation, fair enough? "
"I think that's the most important thing is being open, and we do that. How much is too much debt? " asks Zeigler.
"Some things are better to spend debt on. I'm okay with using debt for a house or a car because there is something attached to it. You don't want to use your credit cards to fund your life. If you find yourself in that situation, you want to get yourself a debt reduction schedule together. The first thing you want to do is cut your spending. Cut your credit cards. Don't spend anymore money," Rohr urges.
"Credit cards are good, then you can get your debt reduction plan together. I love Dave Ramsey. He says it's the snowball effect. You pay one small debt off, then when that's done, use the money to pay off the next debt. And then once you've paid off all the debt, you can use that money and it can go to savings. I want to point out a couple people I love. Dave Ramsey is old school and good.
But I also love Ramit Sehti. He's got some very fresh ideas for making good decisions. This book, "Richest Man in Babylon" was written in the Depression. Very simple formula. Spend 10 percent, save 10 percent. Very simple. There are ways to get out of debt. It takes discipline. It is never too late, and time is on your side if you start now. Another idea, have a garage sale. Clean out the garage, and use what you don't need to help pay off your debt. Get conscious about your spending, and you'll be back on track. Get rid of the ball and chain!"
Borrowing money for a car or home can make good financial sense. But easy access to credit cards as well as challenging medical costs, student loans or job loss can quickly create a boat anchor of debt. "Today, the average household with credit card debt has balances totaling $16,061, and the average household with any kind of debt owes $132,529, including mortgage.
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