Debt Happens

Written by David Dixon – 8/29/22

Part of adulting is the potential to go into debt. Managing debt effectively takes planning and management. You should not be ashamed to take out a loan, or to buy a car or house on credit. Just remember, this has to be paid back and interest is added.

Easy tips to manage debt effectively:

• Set up reoccurring payments (ideally automated payments)
• Pay on time
  • Being late could hurt your credit
  • Late fees could be assessed
• To pay debt faster:
  • Eliminate unnecessary expenses from your budget
  • Look for ways to increase your income
• Borrow smart - study options before you take on debt.
• Credit card debt - negotiate lower interest rates.
• Refinance loans if you are able to lower interest rates.

Create a savings account for unexpected life events.
For example, debt does not always have to do with your choices. A costly medical emergency or a natural disaster striking your home can cause you to have debt.

To manage debt:

• Make a list:
  • debts
  • mortgages
  • credit card payments
  • student loans
  • car loans
  • any other debts you owe
• Start paying debts with the highest interest rates first. It will save you the greatest amount of money.
• Debts in lesser amounts:
  • Prioritize them by the one(s) that approach your maximum credit limit.

When you’ve paid off your debt, put those same monthly amounts into savings funds for future purchases:

• emergencies
• annual holidays and gifts
• major home repairs/improvements
• replace your car
• more education
• bucket list travels

By managing and planning your debt, you can get on a path to a better future.

"Wars in old times were made to get slaves. The modern implement of imposing slavery is debt." - Ezra Pound

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