Recent
studies show 70% of Americans are in debt. Some are in excessive
debt, while others are not. Some are comfortable with excessive
debt, while others could never live with it. Why is excessive
debt a "bad thing?" The problems are not only financial,
excessive debt can cause terrible emotional stress.
First let's start with the emotional stress. Having to think
about excessive debts, for most people, causes excessive
stress. Many of you will agree with that, from past experiences.
Getting rid of debt-related stress makes you feel better,
and feeling better leads to healthier living.
Another equally serious problem with debt is that it runs
on auto-pilot, placing an individual in even more debt. How
so, you say? There are two reasons, one is that most of us
don't pay attention to the interest included in our monthly
payments, and the other is, many people don't know, interest
is compounded monthly. The fact interest charged is compounded
monthly, means we pay more for our credit than most of us
realize.
To alleviate excessive interest charges
the remedy is to, get out of debt. How can you accomplish
this without stress?
For starters, it will definitely take very serious planning.
Pull out your credit card bills. First, look at your monthly
payment, then look at the portion that goes to interest only,
make an additional monthly payment and designate it to "principle
only".
Look at this example (these are approximate values, and
this is a hypothetical situation):
Say you owe $10,000 on a credit card. Your
interest rate is 15%. Use our Minimum
Payment Credit Card Calculator to
find out what additional payment you will have to pay in
order to pay off your $10,000 credit card balance in 1 year,
2 years, 3 years and 4? Remember, you must stop using it
(unless for dire emergencies), in order to pay it off. This
goes for other bills as well.
Related Links:
No Consolidate Loan Calculator
Accelerated Debt Payoff
Lois Center-Shabazz is the founder of MsFinancialSavvy.com and author of the
3-time award-winning personal finance book, Let's Get Financial Savvy! ISBN
#0971979502.
Article
Archive Home
Forums | Chat | eBooks | Join |
