Pay Off Debt

By: Brian H. Miller


Have you ever owed anyone money before? Didn't it place a burden on you? Owing someone money will always bring that cloud over your head and keep it there. It is not a good feeling. Who you owe the money to will also make a big difference.
Have you ever borrowed ten or twenty dollars to a friend or family member, you probably didn't feel very obliged to pay it back because you agreed you'd pay it back when you could. If you instead owed them a thousand dollars with a 10 percent agreed upon interest rate, you'd have a bit more of a burden on your shoulders.
The more burdensome debts are not the ones you owe your friends and family. It is usually the larger debts with the higher interest rates. Credit cards are known to charge some of the highest interest rates, anywhere from 12% to 24% or more. This kind of debt can really build fast with such high interest rates.
Should you pay your debt off? Yes. When it comes to financial management, paying off your debt should be top priority. One of your life long goals should always be to pay off all your debt. Debt grows faster and faster the more you have.
Some say it's not important to pay off a mortgage or that you should even always have one because of the tax deduction. You can only deduct the interest you pay on your mortgage, and that's only a percentage. If you had no mortgage, you wouldn't have to pay any of it.
For example, if you paid $2,000 one year in interest on your mortgage and you are in the 15% tax bracket, you only get to save 15% of the $2,000 which is $300, not the whole $2,000. It's a limited amount of savings and you should not prolong mortgage expense beyond what you original set it up for.
You could say that you could invest what you aren't paying for your house at a higher rate than the mortgage rate and make more money. How many people actually have that money now and if they could save it, how many would invest it and not just go and spend it?
All other debt you should pay off as soon as you can. Credit cards, car loans, and other loans have high interest rates that you must pay down. Better yet, don't accumulate this debt to begin with. You don't need a brand new car, you can buy used, and you never need to use a credit card, but if you do, always pay off the balance at the end of every month.

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