Paying Off Debt

Before you can start saving money, you first need to make an assessment of your debt. There is good debt and bad debt, as well as every shade in between. It will be up to you to determine which debt needs to be paid off before starting a regular saving routine. The only type I will comment on that almost always is “bad” debt is credit cards. Consolidate or pay these off immediately. You’re probably paying upwards of 10% interest on this debt, and potentially as high as 30%!

On the other end of the spectrum, not every bit of debt is bad. For example, mortgages are good debt (most of the time). More often than not your money would be better utilized investing rather than paying down your mortgage. If you’re overpaying your mortgage and you don’t have a safety net of at least a couple of months of expenses socked away, STOP! there are more important areas to allocate your money.

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