What Is Debt?
Debt isn't always a bad thing. Loans and other lines of credit, such as credit cards, provide individuals and businesses with the spending power they need to accomplish their goals. Debt becomes a bad thing when you can no longer pay back what you owe.
How Can I Avoid It?
There are many steps you can take to avoid going into debt, such as:
- Paying the entire balance, not just the minimum amount
- Not missing a payment
- Building an emergency fund
- Paying your bills on time
- Getting the best loan rates available
- Not taking on unnecessary debt
- Limiting the use of credit cards
To keep track of your bills and payments, you may find it helpful to create a bill payment calendar. Tools like these make it easier to stay on top of your financial responsibilities.
How Can I Get Out Of It?
If you ever find yourself in debt, here is a list of things that might make paying it off a little easier:
- Create a budget
- Prioritizing paying off higher-interest debt first
- Refinance your loan with a better rate
- Transferring your credit card balance to one with a lower rate
Further Reading
