Debt Happens

 
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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.

BLOGPOST_ManagingDebt08292022A.jpgTo 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.

BLOGPOST_ManagingDebt08292022B.jpgWhen 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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