2. Manage Debt

By Cheryl Sperling 




"Credit can be a great financial tool but when it is not used properly it can create serious debt problems."

We hear of teachers, employees and many others who continually borrow to pay their debts. Even before they get their pay checks, its gone. I don't know if you belong to one of these people, but if you are not, congratulations!

Having a credit card is good and convenient as it makes paying easier and safer as we don't have to bring a lot of money. And there are instances, like buying an airfare ticket online, where we really need a credit card. Plus you can earn points and freebies which the issuing company are giving to their card holders. Now, the catch is that you have to pay what you charged to your card in full on or before the due date so you wont incur a high interest and charges should you fail to pay on time. And even the yearly charge for your card could be waived if you ask your bank for it!

We are teaching you to consolidate your debt or eliminate them totally! (I will discuss this further in a different post.) Debt especially those that are of high interest (5-6) should be addressed first as it will devastate you financially. If you need to buy some high ticket items , like a new flat screen TV perhaps, why don't you consider saving up for it first. Or just be contented first of your old TV .... as long as it serves its purpose and you can watch your favorite programs then make do with it for now! Delayed gratification is one attribute we are teaching here. :-)






This post is from the series Six Steps to Financial Freedom. You can read the start of the series by clicking here.