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What to do when expenses add up but income declines?

The last several years included economic recession and stagnation that has been extremely hard for millions of Americans, including many of our Escondido readers. Most of the time when an individual or family is dealing with significant financial hardship, all options are usually on the table. During the years of economic turmoil, the first option may have been to turn to funds held in savings accounts. After those funds were depleted, the next option may have been to turn to credit cards.

While doing whatever it takes to take care of the family during financial challenges is laudable, it can also lead to some major headaches down the line. If there is someone in Escondido who now finds themselves in this position, apparently they aren't alone.

According to a recent report, approximately 30 percent of Americans have less in savings than they do in credit card debt. Even though media reports would have California residents believe that the economy is improving, the empirical data still shows that millions of people are having a great deal of trouble putting funds away in case of a "rainy day." For many people, it has been pouring down rain for years.

Credit cards can be handy in a pinch, and they do help build a healthy credit score if used correctly, but sometimes an overreliance on these financial tools can put an individual or family in a precarious position. When creditor harassment heats up or even the minimum payments on credit cards become unmanageable, it may be time to start to consider filing for bankruptcy as a legitimate option. Indeed, with the way the current economy is playing out for many people bankruptcy may become the only option.

Source:, "Close to half of Americans have more credit card debt than savings," Constantine von Hoffman, Feb. 18, 2014

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