1. Smart Money Says – Pay Down Debt
Debt is something we can never get away from in one form or another. This is
especially true of financial debt. Except for those rare exceptions almost all of us owe
money to someone – usually this is in the form of credit card debt.
Credit cards are a godsend – at least depending on who you ask. For many, it made life
easier because you can now buy a lot of things without the need to bring a lot of cash.
And because it has a payment plan you don’t have to pay all of it at once.
That being said, if you only pay what is needed every month you do pay interest for it.
After all, you basically borrowed money from the credit card provider in order to pay for
your purchases. Obviously, these institutions will charge interest because that’s how
they make money.
The thing is, if you have credit card debt you are basically putting a lot of money just to
pay off the principal loan and the interest that comes with it. The longer it takes you to
pay that amount you used the higher the interest you also pay which means that for a
long time to come you will be tying up your money just to pay off the debt instead of
using it for your benefit.
A way for you to free up income and lower your debt is to be aggressive with your
payments. How can you do that? Well for starters pay more than just the minimum
payment that is posted in your statement. That means that if your minimum payment
required is only 200 dollars pay more by adding an extra 50 or even 100 if you are able.
What does this do? This does a couple of things for you. It lowers your debt pretty
drastically since you are paying more of it. It also lowers the time needed to pay for that
debt since you are paying more of it. Finally, it lowers the interest you have to pay since
you’re lowering the principal amount and at the same time shortening the time needed
to pay it off.
Financial tips at your fingertips from Deborah Koval.