Debt is a tricky subject. It’s a tool. And like all tools, it can be incredibly useful, or incredibly dangerous. for almost all situations, and for almost all individuals, the best options is to limit or eliminate borrowing of any kind. Get and stay out of debt.
Eliminate credit card debt:
Practice responsible credit card use. You need only one or two credit cards. Credit cards should be paid off each month. Never carry a balance.
Getting out of debt:
If you are in debt, use one of the proven methods that have helped others in this same issue. The two most popular, the ‘Debt Snowball’ or ‘Highest to lowest interest rate’ methods, both work.
The average American owes $16,000 in credit cards, paying $2,000 a year in interest! [Source]
Minimize mortgage. Pay off as fast as possible by making extra payments, shortening the term and paying off principal whenever possible.
Minimize or eliminate depreciating assets (car, boat)
Is there Good Debt? Sure, there is, depending on your situation, experience, capital base and financial savvy. If you’re reading this article, you probably aren’t there yet. In future posts, we’ll explore when is the right time for that play.
Are you debt free? If no, are you trying to be? Do you have a plan? How’s it going?
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