Manage Your Debt
“Debt is a trap, especially student debt, which is enormous, far larger than credit card debt. It’s a trap for the rest of your life because the laws are designed so that you can’t get out of it. If a business, say, gets in too much debt, it can declare bankruptcy, but individuals can almost never be relieved of student debt through bankruptcy.” – Noam Chomsky
5 Tips to Manage your Debt
While the world cannot function economically without debt, it becomes a problem when it is abused. Most people have some kind of debt and below are five tips to help you manage it.
1. Know how much you owe
Make a concise list of all debts and review it often. It’s good to understand the big picture of where you’re at financially so you can create a plan to pay down each amount.
2. Live by a budget
Now that you know how much you owe, you can figure out how much money you need to set aside to pay off your debts, while managing your monthly living expenses.
3. Decide which debts to pay off first
To start, focus on the debt with the highest interest rate. As you pay off each loan, start using those funds to pay down your next debt.
4. Pay your bills on time
Your credit is something you need to protect and build. Late payments also make it difficult to pay off debt in a reasonable amount of time, due to extra fees that may be incurred.
5. Consult a financial professional
To start, focus on the debt with the highest interest rate. As you pay off each loan, start using those funds to pay down your next debt.