4 Personal Finance Tips to Keep Your Debt At Bay Before the Holidays

If you want to achieve your financial goals, staying away from debt is very important. However, doing this may be a struggle. Maybe right now you are still trying to settle your debts, or you may find yourself working two or more jobs simultaneously. 

If you want to keep your debts at bay, here are some tips you should follow:

1. Begin paying for the smaller debts first before you start dealing with the larger ones.

Studies show that people have greater confidence that they can pay their huge debts when they deal with the smaller ones first. Do not force yourself to tackle something that may be beyond your capacity. Start small until you get to conquer the bigger debts.

2. Never cosign a loan.

Regardless if it is your friend or family relatives, do not cosign a loan. If the borrower fails to pay for his or her dues, your credit score will definitely be affected. The lender will not only chase them, but they will also look for you. Cosigning loans might end up with broken relationships. So, avoid doing so.

3. Choose mortgage payments that are below 28% of your income per month.

If you are thinking of buying a home, you need to consider your budget and how much you are earning. Since you are also taking care of other expenses, you cannot just give all of your salary away to your mortgage payments. To help you lessen the burden of paying, choose mortgage plans that only take 28% or lower of your income.

4. Consider federal loans over private loans.

If you have plans that are very hard to accomplish due to some circumstances, checking out federal loans can be helpful for you. The good thing about federal loans is that they offer flexible payment terms to make paying your debts easier for you.

Leave a Reply

Your email address will not be published. Required fields are marked *