Your money may be likened to dirty laundry – something you would rather not air out in public. Debt, in particular, is a foremost concern in most households today. Over the years, you have been told many things regarding debt: there’s good debt, bad debt, consolidated debt, not to mention how to get rid of debt. Everyone has an opinion about debt, and – depending on whom you ask – they will tell you what to do with it.
Let’s be honest. Most people have debt other than a mortgage. Some debt is “good.” This means the interest can be deducted on your tax return. Examples of “good” debt include: debt that you use for investing in the stock market, mutual funds, rental properties, or other investment opportunities.
Other debt, namely consumer debt, is the “bad” debt. First, an honest statement about “bad” debt: you incurred it making good or bad decisions, but the debt is here. So, stop beating yourself up over it and just accept it. Now that you have debt, we need to do something about it.
Secondly, conventional thinking says pay off the debt at all costs – don’t do anything else until it is gone. Concentrate on the debt and only the debt.
We are challenging the conventional mindset and want you to think about something radical: save while you are paying off debt. Set a specific payment that you will put away – rain or shine. The concept of “pay yourself first” is about creating wealth to run circles around your debt.