Debt Reduction
Debt reduction may be high on your list of priorities if you’re one of the increasing number of people with high personal debt.
Around the western world, levels of personal debt are at record highs – largely driven by the power of consumerism, the use of credit cards and more easily attainable loans through sometimes ‘predatory’ lenders.
Don’t get me wrong – debt is not a bad thing, but the ‘type’ and ‘level’ of debt you’re in might be. The important thing is to understand your debt and have a strategy for paying off your debts by having debt reducing goals.
So you need to know:
- What is good and bad debt? Good debts are debts that help you build wealth such as business loans, house loans and even student loans. Bad debts DON'T help you build wealth and include personal loans for holidays and credit card debt.
The key is to minimise your bad debts.
- Understand your debts - who do you owe, how much do you owe, what are the repayments, how long will it take to pay it off and what is the interest rate.
- Prioritise you debt repayments - Debts with a higher interest rate cost you more money than those with a low interest rate. Your priority for your debt reduction goals therefore needs to be to pay off the loans with high effective interest rates first.
- Avoid more (bad) debt - Only go into debt as much as you can afford to repay.
Remember that debt is not bad, it’s all about how you manage it - and this should be the focus of your debt reduction goals.
There is a debt record sheet in the ToolBOX under the section on Financial Tools you can use to track your debts. You can also use the Saving Plan in the ToolBOX as part of your debt reduction goals.
And check out our sister site Your Money and Finance - it has a section dedicated to loans and finance.
Jack Canfield's Key to Living the Law of Attraction: A Simple Guide to Creating the Life of Your Dreams
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This book is a simple 'how to' guide for using the Law of Attraction to create the life you desire. Within these pages, Canfield clearly explains not only what you need to know, but what you need to do in order to attract what you want in your life. Jack Canfield's Key to Living the Law of Attraction addresses the important issues of clarity, purpose, and action. |
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