Managing debt is essential for financial health. This should be the first place you start before thinking of investing. Unless your debt has an interest rate lower than four percent you need to tackle your debt. You guarantee yourself ten or fifteen percent returns by just paying your debt. You will not find that kind of return out there. Here is where you start:
- List out all your debts. How many do you have? Which is the largest? Which has the highest interest? You can then focus on your debt in several different ways.
- The best way should be to pay off the debt with the highest interest. I know that sometimes people prefer to pay the ones with the smallest debt. That is okay too.
- Once you pay off one balance, you could use that money to help pay the others in the order that you choose.
The last thing to consider is consolidating your debts. There are a few loans out there that could offer you a great interest rate if you consolidate everything under them. Some may even offer an introductory rate with no interest just to get your business. Please make sure that once you consolidate that you focus on paying it off. This should not entice you to prioritize other things.