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Debt management one option when budgeting is not enough
12/31/2009
Budgeting is one of the key ways a consumer can avoid - or get out of - debt. However, some people may not know where exactly they should put their money.
In a recent piece for her website, financial expert Liz Pulliam Weston noted that there are a number of ways for consumers to determine a budget for their household. For example, they may tap into the resources made available by the U.S. Census Bureau, which tracks the average costs to consumers for things like living expenses or food.
"You may find the information more interesting than helpful, however, because every family's situation is different," Pulliam Weston wrote.
Another option suggested by Pulliam Weston is to follow a model put forward by Elizabeth Warren, who is a professor at Harvard University. According to Warren's plan, consumers should set aside 50 percent of post-tax income on necessary expenditures, while 30 percent can go to more discretionary items. The final 20 percent should be used for saving and paying off debt.
Of course, not everyone has the funds available to reduce the amount of debt they owe. Those who are having trouble may consider a debt management plan, which can help reduce interest rate payments on credit card debt.
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