For those in debt, it's the biggest thing preventing a higher level of resilience. It's a lesson I learned 25 years ago, and haven't been in debt (other than two mortgages) since. It was a huge stress reliever to live within my means.
A few points to add:
- bankruptcy - can be used for most debt except student loans. If you can get past the moral dilemma, and want a fast track to being debt free, this may be an option.
- cell phones - many companies lock you in to a higher monthly fee by (you) subsidizing new phones on a regular basis. It takes some research, but using an older or refurbished phone can save huge bucks, and discount plans are out there. $20 or so for unlimited text and talk is possible, even cheaper plans for those who dig around or don't use the phone much.
- mortgages - paying them off early is generally better, though interest rates are rising, making some "investment" products more attractive. Stocks are very risky, and bonds too. Do NOT refinance to simply get a lower interest rate. You "reset" the amortization clock. Review mortgage and principal amounts early in a mortgage versus later in the cycle to better understand this. Bankers are not your friends, and the interest is NOT evenly distributed across the life of the loan - it's frontloaded with the bank getting their flesh early on. Refinancing and debt consolidation may still make sense in some cases, but run the numbers to make sure.
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timeasmymeasure
Excellent summary - high priority now, more than ever
Date: 2022-04-05 08:51 am (UTC)For those in debt, it's the biggest thing preventing a higher level of resilience. It's a lesson I learned 25 years ago, and haven't been in debt (other than two mortgages) since. It was a huge stress reliever to live within my means.
A few points to add:
- bankruptcy - can be used for most debt except student loans. If you can get past the moral dilemma, and want a fast track to being debt free, this may be an option.
- cell phones - many companies lock you in to a higher monthly fee by (you) subsidizing new phones on a regular basis. It takes some research, but using an older or refurbished phone can save huge bucks, and discount plans are out there. $20 or so for unlimited text and talk is possible, even cheaper plans for those who dig around or don't use the phone much.
- mortgages - paying them off early is generally better, though interest rates are rising, making some "investment" products more attractive. Stocks are very risky, and bonds too. Do NOT refinance to simply get a lower interest rate. You "reset" the amortization clock. Review mortgage and principal amounts early in a mortgage versus later in the cycle to better understand this. Bankers are not your friends, and the interest is NOT evenly distributed across the life of the loan - it's frontloaded with the bank getting their flesh early on. Refinancing and debt consolidation may still make sense in some cases, but run the numbers to make sure.