Everyone gets into a little debt sometime in their life. The average American household owes $16,000 in credit card debt and over $132,500 when you include mortgage loans.
Understanding these debt problems will help you use debt correctly, pay it off faster and maybe even avoid it altogether.
Mistakes People Make Before Getting in Debt
There’s two great points here. 1. Not all debt is bad. Without a mortgage loan, few people would ever be able to afford to buy a home.
2. Don’t wait to be debt-free to start investing. Pay off high interest debt but get started on your long-term financial goals as well.
Mistakes People Make Before Getting in Debt
Don’t Avoid Debt and Hope it Will Go Away
Interest doesn't stop just because you quit looking at the bill. You should be actively prioritizing paying down your debts.
How to Plan Your Debt Payoff for Success
If you really want to pay off your bad debt and get out from under the burden, learn how to prioritize and plan your debt payments. You can also prioritize debt payoff by interest rate in a method known as the avalanche.
Dealing with the Worst Debt Mistakes
A clear cut plan with defined steps and timelines will help keep them focused and make it easier to deal with the inevitable setbacks.
Think Long-term to Ditch Your Debt
Ditching your debt and avoiding some of the worst mistakes means thinking long-term and how that debt affects your future.