Sexton Advisory Group's Tips on How to Avoid a Debt Trap

Financial Consultant Steve Sexton Shares His Best Practices to Combat Debt Accumulation

SAN DIEGO, Sept. 7, 2022 /PRNewswire/ -- According to CNBC, the average American has over $90,000 in debt. Accumulating debt is not only a financial burden – it can be mentally and emotionally taxing as a borrower finds themselves trapped in debt because the high-interest charges keep piling on. Steve Sexton, financial consultant and CEO of Sexton Advisory Group, shares some practical tips to help better manage, stabilize, and avoid a debt trap.

• An emergency fund is essential. "Aside from budgeting and living within your means, having an emergency fund for unexpected expenses is one of the best ways to avoid going into debt in the first place," says Sexton. "Plan to have at least 6 months' worth of expenses saved in this fund, which can help you financially weather a temporary crisis and keep things running until the situation stabilizes."
• Consolidate various loans under a single one. "Taking on multiple loans at different interest rates beyond one's capacity to repay can be resolved by taking on a single loan,'' adds Sexton. "By doing so, the borrower can simplify their finances and no longer need to worry about remembering multiple repayment dates. This step can help the borrower better emerge from a debt trap."
• Leverage cash flow to prepay high-cost debt. "An important factor to streamline your repayments and avoid debt traps is to use a temporary inflow of funds to prepay debt with high-interest rates," says Sexton. "These include annual bonuses or capital gains on share sales which can be used to prepay personal, credit card, or auto loans. When loans with high-interest rates are repaid, you are effectively saving the extra amount that would otherwise have gone towards the higher interest charges."

Sexton is a California-based retirement planning professional with over two decades of experience in personal finance and retirement strategies. He specializes in retirement and investment planning, budgeting, debt management, asset protection, estate planning, and more. He is also the host of Saving with Steve, a personal finance podcast streaming on Spotify, Google Podcasts, and Apple Podcasts. For more information on Sexton Advisory Group, visit www.sextonadvisorygroup.com.

Media Contact: [email protected]

SOURCE Sexton Advisory Group