Get Rid and Stay Out of Debt!
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Get Rid and Stay Out of Debt!
By Martin A. Federici, Jr., CEO of both MF Advisers, Inc. and MF Tax & Accounting, Inc.
I’ve touched on debt in many of our articles through the years, but have never written an article dedicated solely to the topic of debt (imagine my surprise!) so here we go!
Two things you need to work on accomplishing BEFORE you take on debt of any type:
Create a realistic budget AND stick to it (this helps eliminate many $ issues).
Establish a sufficient emergency fund ASAP (so you don’t turn to debt to handle the issue).
If you haven’t done those 2 things mentioned above BEFORE borrowing $, you’re setting yourself up for a world of pain.
Once you’ve got # 1 & # 2 above in place, make sure the debt you’re considering is a smart one. What do I mean by “smart”? Well, here are the debts most would consider somewhat acceptable (YMMV), provided that the interest rates & terms are reasonable:
mortgages
car loans
home improvement loans
business loans
college loans
And here are the terrible debts/situations to avoid/limit whenever possible:
Big-box store credit cards (this is the one that gets a LOT of people in trouble)
Over-leveraging yourself (borrowing way too much vs. income generated)
Here are the “make sures” that should accompany any of these debts:
the repayment schedule for the borrowed $ fits into your budget easily
make all debt payments on time (don’t be late!) - this helps your credit score
the interest rate is in-line with current rates and not excessive
if the interest rate appears excessive, negotiate for a lower rate - no need to pay more interest than you should!
Now that you’re armed with this knowledge, taking on debt should be a smoother decision for most people. You’re welcome!
Find an experienced financial advisor who helps clients use debt wisely, works for an RIA firm, earns his/her money from fees (NOT commissions), believes in having an abundance of quality investment choices for clients, and has the heart & demeanor of a teacher, NOT a salesperson, and chances are you’ve found the right financial advisor to help you prepare and plan for your goals.
For more information, please visit https://mfadvisers.com, email marty@mfadvisers.com, or call (570) 760-6524.
About MF Advisers, Inc.
MF Advisers, Inc. is a full-service, fee-only RIA firm and fiduciary based in PA & FL specializing in 403(b)s, 529 college savings plans, wealth management, investment advice, and financial planning (including retirement planning).
With 25+ years of licensed experience, over 10 years of professional education, and an unwavering commitment to improving your financial situation, MF Advisers, Inc. is the advisory firm to best serve YOU.