Nobody wants to be in debt.\u00a0 Having people or corporations to whom you owe money is never a good thing; it forces you to use your (always limited) resources to enrich someone other than yourself, and decreases your ability to meet your own goals.\u00a0 It\u2019s not the sort of thing that anyone wants to face.<\/p>\n
There\u2019s quite a bit written about how to pay off debt and get your finances in order; it\u2019s one of the most popular financial topics, second perhaps only to investing.\u00a0 I can\u2019t hope to cover all the varieties of debt elimination in a single post, but hopefully this can help you get on the right path (and since I could use some help in that area myself, perhaps help me organize my thoughts on what to do myself).<\/p>\n
A: Ah, starting off with a tough one.\u00a0 There are a number of different approaches to paying off debt, with numerous proponents of each.\u00a0 Strictly mathematically, the best way to pay off debt is to pay off the highest interest debt first (while paying the minimum on all the other debts, of course).\u00a0 That\u2019s far from the only approach; another popular method is to pay off the lowest-sized debt first (a la Dave Ramsey), which has its own advantages and disadvantages.\u00a0 My first choice would be the highest interest rate first (although, there are other considerations).<\/p>\n
A: In general, minimally; the type of debt should be a secondary consideration.\u00a0 That said, different debts are treated differently under the law, and depending on your situation, you might need to modify your payment order.\u00a0 For example, credit card debts are wiped out by bankruptcy, while student loans aren\u2019t.\u00a0 So, if you are approaching bankruptcy, prioritizing student loan payments over credit card payments, regardless of interest rates, might be in your best interest (although, if you are approaching bankruptcy, you should talk to your lawyer and find out your best option).<\/p>\n
A: It should be near the top of your money goals; there are not too many things that should take higher priority.\u00a0 I can only think of a few off hand; building up an emergency fund (at least a few months of expenses), keeping at least some money flowing into retirement investments (no sense getting out of debt if you don\u2019t have any longer term goals to meet), and continuing to donate to charity being the top of the list.\u00a0 But a sizable amount of your income should go to paying down debt, until you have gotten rid of the debt.<\/p>\n
A: I would be very leery about debt consolidation in most situations.\u00a0 Particularly when it involves debt consolidation companies, there is the potential for them to make things worse, not better (by withholding payments from your creditors to force a better deal, wrecking your credit in the process).\u00a0 You can consider DIY debt consolidation, by getting a loan from somewhere like Lending Club and using it to pay down your other debt.\u00a0 (Just make sure you don\u2019t use it as an excuse to run up more debt and get hit by a double whammy of debt repayment).<\/p>\n
A: It can be tough to find extra money to cut down your debts (if it wasn\u2019t, nobody would have debt troubles in the first place).\u00a0 There are numerous areas where you can cut down\u00a0 spending to put more money toward debt repayment; basically any area of your life you haven\u2019t already cut to the bone (which for most of us means all the areas of our lives) can be cut.\u00a0 Also try building up your income, either by getting a raise or building a side income.\u00a0 Remember, though,\u00a0 to cut down debt before you start further spending.<\/p>\n
Nobody wants to be in debt.\u00a0 Having people or corporations to whom you owe money is never a good thing; it forces you to use your (always limited) resources to enrich someone other than yourself, and decreases your ability to meet your own goals.\u00a0 It\u2019s not the sort of thing that anyone wants to face. […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_uag_custom_page_level_css":"","site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"footnotes":""},"categories":[878,376],"tags":[],"class_list":["post-3319","post","type-post","status-publish","format-standard","hentry","category-earning-and-saving","category-mixed-bag-monday","wpautop"],"yoast_head":"\n