One of the most important things to include in any budget is the payment you make toward any debt you have beside your mortgage. This includes credit cards, student loans, and any other personal loans. According to the April 2009 Nilson Report, in 2008 over seventy-eight percent of American households had one or more credit cards. The Nilson Report also states that at the end of 2008, the average American household had an average credit card debt of $8,329.00. In today's economy these numbers aren't helping anyone and we as Americans are only sinking deeper and deeper into debt as we are being laid off from our jobs and our savings. Sometimes its hard to grit your teeth and write the check for your credit card payment, but the best thing you can do for you and your family when creating a budget is to push as much of your income as you can toward paying off your credit cards, especially high interest credit cards. This is definitely an area of your budget that I would encourage you to invest the money you are saving in other areas of your budget. One way you can do this is by figuring how much you are saving in other areas of your budget. Maybe you've cut your utility bill in half by switching to energy efficient appliances or you could be saving $100 a week in fuel because you choose to start carpooling to work with a co-worker. No matter where the savings are coming from, after you get a figure, you should take that amount and start putting it in a separate savings account along with the money you use to make your monthly payments on your debt. That way when it comes time to make a payment on that high interest credit card, you can start paying a little extra on it. Even if paying extra on it every month decreases your monthly payment on your statement, you should still keep paying the same amount and you will be amazed at how easily it will be to pay down those credit cards.



You may be wondering where are student loans in all of this? Student loans are a priority, but not as much of a priority as your credit card debt. This is because student loans usually have a reasonable interest rate and they may shoe up on your credit report, but I don't believe they hurt your credit as much as credit cards do. You should still be actively making payment on your student loans if you have any, because even though the interest may be reasonable, interest is interest and the longer it take you to pay them off, the more you'll end up paying on them in the end.

This is an important part of any personal budget and should be consider as much of a priority as making your house payment. You will be amazed at not only how much it will help your credit to pay off your personal debt, but also how much stress it will relieve knowing that its being taken care of and you are doing something that won't just benefit you now, but it will also benefit you in the future.