Credit cards aren’t the enemy is used wisely.
Since the average American has about $10,000 or more in credit cards debt in their portfolio, it doesn’t necessarily mean that that’s a bad thing. Work on keeping current, maintaining a lower interest card, and paying off more than the minimum payment on a regular basis.
Some debt is good and some debt is bad.
Borrowing for some of life’s major purchases such as a car, home or wedding perhaps, isn’t necessarily a bad thing. Just make sure you shop around for a better deal always and don’t borrow more than you can afford to pay back.
Pay off your highest interest rate debts first, always.
Some people are so attached to paying off their largest bills first, when many times this is at a much lower rate than their smaller bills. Make payments smartly and really look at where you can save money overall by paying off the higher interest rate cards and balances first and in larger portions.
Get a grip on your daily, weekly, monthly spending.
Simply that. Watch your extra spending, look for a deal when you can get one. Stay in and watch a movie instead of going out to the movies, or order pizza instead of doing a sit down dinner. For the household, watch your usage of hot water and keep the thermostat down during extended periods of absence or if you’re gone all day. You’ll find yourself having that extra $100-1000 you were wondering disappeared every month.
Don’t just do ‘the minimum’.
This goes across the board. Instead of just getting a receipt, make sure to record the receipts in your folio or ledger, or Quickbooks on a weekly basis or bi-weekly if you have less. Instead of just paying the minumum card payment, pay more if you can. Doing a little extra will go a long way to your debt to income ratio.
Learn to be ready for anything by building and maintaining an emergency fund.
Have some extra cash saved. What if you’re hurt or there is an earthquake, or suddenly you lose your job. What if one of your family members were hurt and you needed to take an extended leave from work. Secure yourself by keeping an emergency fund to keep yourself afloat for 3 to 6-months of bills.
Be careful what and where you borrow.
Don’t always look at your 401k as the place to go for money, or a refinancing of your home loan. You could wind up losing your home and fall short of your long-term investment goals. Give it some thought first!
