I don't condone going into debt, but what if you already have some? In this clip, courtesy of Fox 59, I state my case for a realistic and aggressive pay back plan.
You wanted a bigger house or you had a medical emergency, whatever the reason, the fact is that now you are in debt. The company or bank you owe money to will give you a time frame and a monthly payment amount, but you don't have to follow that. If you have to be in debt, I want you to be aggressive about paying down your debt. I've said it before but it bears repeating, you should not be saving if you are in debt. In my book 60 Days to Change, I lay out how I want you to save no more than $1,000 in an emergency fund and then begin to aggressively pay down your debt. Once you are debt free you can save more.
The financial stress it takes to get out of debt can be overwhelming, but there is one thing that can give you relief, a budget. I get it, budgets aren't sexy but they can and will make your life more manageable and get you out of debt faster.
Here is what I don't want to happen, I don't want you to exhale as soon as you go into debt. Leading up to buying a new car you are anxious about the decision, but once it's made you have a tendency to exhale and loose the urgency you felt before. Why is this? Probably because you have decided in your mind that you accept this $350 payment for the next 5 years and that's that. But that isn't good enough. Don't get complacent with your debt. The path to financial wellness is not a smooth one and it will take some hard core budgeting and major sacrifices to get out of debt.
Peter Dunn a.k.a. Pete the Planner® is an award-winning financial mind and a former comedian. He’s a USA TODAY columnist, author of ten books, and is the host of the popular radio show and podcast, The Pete the Planner Show. Pete is considered one of the foremost experts on financial wellness in the world, but he’s just as likely to talk your ear off about bass fishing.