Financially Frugal – Tip #2

December 22, 2011 § Leave a comment

Second, manage your debt. It is generally said that there are two kinds of debt: bad debt and good debt. “Good” debt involves borrowing for an expenditure that will increase its worth over time. This includes school and business loans and a home mortgage. Bad debt is high-interest and revolving credit, borrowing on items that are disposable and also paying too much interest for the purchase.

Do everything you can to pay off credit cards. Whether it’s adding an extra $5 per month when you send out the bill or adding $500 per payment.  No matter your income level, pay down debt, especially on high interest credit. Don’t add more purchases to the account. Don’t accept the 10% off for shopping today with your new store credit card! Just say NO. Be self-controlled and disciplined.  Most of us are not in the situation where we are financially desperate, but trends indicate that we simply want what we want when we want it and just keep shopping. Knock that off.

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