As I have said previously, it’s important to get out of debt. It’s also important to be saving and both can be done at the same time. Financially speaking, putting off saving in order to pay off your debts can be a huge mistake.
You should tackle credit card debt first, as this usually carries the highest interest rates. It’s important to be saving from a psychological standpoint. If you have no savings whatsoever, you will feel broke and out of control.
Most people want to own their own home. This is a good goal but is it really necessary. If you have credit card debt and owe money on auto loans and possibly college loans, don’t add another debt burden by buying a house.
Everyone will tell you it’s a good time to buy a house with the depressed market and low interest rates. What most people fail to do is to factor in the overhead and upkeep costs which will include the following: taxes, utilities, insurance, etc.
A lot of people buy more house than they can afford and the upkeep is the kicker that sends them over the edge financially. Focus on one step at a time. Getting out of debt is a journey; a journey of discipline, delayed gratification, and perseverance.
If this describes you, instead of buying a house, start saving. Start with 2-5% and increase that to at least 10%. Keep at it. Your savings will add up to the point down the road where you can pay cash for a car and have a hefty down payment for a home.
Patience my friend, patience!
Jacques
CreatingWealthThatLasts
1 comment:
This is such good advice right now more than ever. It is also something that people of this generation has not learned. They want it right now, they want the big house like mom and dad. They do not take into account that mom and dad took years and years to get what they have, but the children want it all right now without waiting. Thank you for the good advice.
Dan and Deanna"Marketing Unscrambled"
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