Consumer Watch: Financial optimism could be holding you back

Optimism in your financial situation could be misplaced if you do not have a budget (KOKH).

Reports of job growth seems to be increasing consumer confidence, but in some cases that optimism could be misplaced. A survey by Lending Tree shows 26-percent of American’s have no plan when it comes to paying off their debt. Feeling financially optimistic about the future, while you don't have a plan to pay off debt, is a problem.

According to that same Lending Tree survey, when it comes to Americans in debt, a large number don't know what they are going to do about medical debt and education debt. Another major problem is the amount of credit card debt and the limited plan to pay that debt down.

If you are feeling good about your financial future, but don't have a plan, it's time to make one.

“First of all, you want to create a budget and make sure that you know what your income is, what your expenses are, and then you want to sit down and identify what the debt is,” says Melinda Warren, Co-President of Hughes Warren Incorporated.

Finance professionals like Warren say that the start of the plan really is that simple. Then, it's a matter of figuring out how quickly you want to pay down debt or how much you want to put away for savings.

When it comes to paying down debt, most people find success paying more than the monthly minimum payment, and by focusing on paying debt down one at a time. Having this plan in place will ensure that the feeling of financial optimism you have in your life is not misplaced.

An important part about paying down debt, is avoiding creating new debt. This often means limiting, or outright stopping your credit card use.

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