My blog has moved! Redirecting…

You should be automatically redirected. If not, visit and update your bookmarks.

Finance For Dummies

Finance For Dummies offers personal finance information on investing, retirement investing, finance, insurance, credit cards, loans and more. Personal finance education is our goal.

Friday, June 23, 2006

Handling Personal Finance Debt

If you have ever seen the numbers they are startling: the average American owes approximately $8,000 in credit card debt. This does not even include student loans, car loans, mortgages, etc. These numbers have increased significantly in the past decade. American's often do not understand how much they can afford or do not care. You see it from people buying too fancy of a car to purchasing a home that is more than they can afford. Because of this trend car loans are sometimes 6 years and some people have 40-year mortgages just so they can afford the payments. What they do not understand is that paying debt back over a longer period of time means they are paying more in interest than they should.

Get a plan:
  1. Identify all of your personal debt
  2. Figure the rates of interest that you pay on each
  3. See if any of the interest rates can be lowered
  4. Pay off the highest interest debts first
  5. Paying the minimum on credit cards is not an option (You will wallow in debt for years and pay an outrageous amount of interest)
  6. If you are serious about lowering your personal debt levels you must examine your spending habits and decide what can be sacrificed in order for you to get out of debt
Being in debt might be a common thing, but you do not want to be in perpetual debt.


Post a Comment

<< Home