Dealing With DebtIf you don’t have unsecured loans, signature loans, and other forms of debt, work hard not to create this type of debt. It is expensive, it lowers your credit score, and repayment of this sort of debt is stressful and drains your paycheck each month. If you already have some debt, work hard to pay it down.

Many people assume that they need to increase their income in order to pay down debt, or they assume that they need to earn more in order to avoid having debt in the first place. Nothing could be further from the truth. Many families manage to live on one income and still save and create an emergency fund. The secret is in the planning. If you want to stay out of debt, you need to budget carefully and spend carefully. You need to set goals and start saving.

Small things can really add up. Growing some of your own vegetables, buying used clothes and cars instead of new, and reducing bills where possible really adds up and the savings can go towards an emergency fund and towards paying off those debts.

Another important part of the equation is paying down more than your minimum repayment amount on your credit cards and other debts. It can make a larger difference than you think. If you have a credit card with an 18% interest rate and a $1000 balance, it will take you over a decade to repay that amount if you pay only the minimum each month. You will also pay more than $1000 in interest as well as your original $1000 debt. However, if you add just $25 more to the minimum amount each month, you will be able to repay the $1000 balance in under two years and you will pay under $200 in interest. Paying off your debts faster counts.…