I’m a CFP: These Are the Top 5 Questions People in Debt Ask Me — And What I Tell Them

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List all your current liabilities.

Before creating the strategy to pay it down, one should further break down if the debt is manageable.

A perfect way to determine that is looking at student loans.

Identify how much money you might allocate towards paying down the debt.

Pick and implement a strategy.

There are two popular strategies to pay down debt.

The second strategy is paying off the smallest balance first and working your way up.

As the expert, I generally suggest paying off the higher interest first.

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The cost to borrow matters.

Look at it through the lens of credit card usage.

One credit agency may charge extremely high interest rates, while another charges a modest rate.

Based on the balance, the higher rate will cost the consumer more over time.

What Should I Do?

Consider consolidating the debt.

A great savings strategy can be to consolidate your debt and make one payment at a lower interest rate.

One must take note of the timeline for repayment and the interest rate thereafter.

Review the plan periodically.

If the goal is to ultimately accumulate wealth, leveraging debt to achieve that goal is possible.

However, one wants to make certain the debt can be managed and eventually eliminated after a stated period.

The notion that its easy to get into debt and a challenge to climb out is true.