Not all debts are the same To start paying off what you owe you need to know what you owe This includes knowing the type cost and urgency of each debt There are five main types of debt Type Avg Interest Term Key Factor Credit Cards - Revolving Highest cost if unpaid Student Loans - - yrs Tax benefits available Auto Loans - - yrs Collateral required Medical Bills - Varies Negotiation potential Credit cards cost more than mortgages A credit card balance at APR costs a year This is before you even pay off the principal https youtu be FlqxN q fA si NMzY YIJVD AmIUG Impact of Debt on Your Financial Health Having too much debt lowers your credit score This happens when you use more than of your credit limit For example on a limit is better than on The weight of unpaid bills creates a mental tax that compounds daily Debt can also delay your retirement and limit your investments Every dollar spent on interest is a dollar not growing in your retirement or emergency fund Assessing Your Financial Situation Before you start paying off debt understand where your money goes Knowing this helps you find leaks and opportunities for better financial planning Reviewing Income Expenses and Budgeting Basics First list all your income sources This includes your regular job side hustles and any passive income Average these amounts over six months for a clear picture Then track every dollar you spend Divide your spending into... Login to read full