The golden rules of debt management
Great f i nancial habits are cultivated by making a few good decisions every day. In the past t wo weeks we’ve delved into the sometimes terrifying world of debt. This week, we speak to top certified financial planners and provide a cut-out-and-keep debt cheat sheet. than the interest required,” he says.
Until you’re in the clear, Hewett says you should try to allocate any spare cash to debt carrying the highest rate and the longest term. It might seem counterintuitive, but if you are currently saving, he advises you compare the interest you are earning with the interest you are paying on your debt. If you are paying more interest on debt than you’re earning on savings, put your savings toward paying off debts first. explains. “Instead, you must first figure out what is causing your debt and why you are spending more than you can afford to. The permanent cure is to identify and end all the ways you are wasting money so you never go into debt again.”