What is debt control?
Debt is used to finance everyday expenses alongside big-ticket items. Debt control manages the risks of carrying liabilities on your books. Proper debt management is critical for leveraging loans into wealth.IdentificationInterest costs of debt financing increase the expense of all purchases. Debt management prioritizes payments according to interest rates. Eliminate high-interest-rate debt first to save money over the long term.FeaturesDebt can be good or bad. Good debt is leverage that can result in growth, such as student loans and mortgages. Bad debts, such as credit cards, are associated with high interest rates and consumption. Debt control minimizes bad debt.ConsiderationsInterest charges can be fixed or variable. Fixed interest rates remain level throughout loan maturity while variable rates fluctuate according to economic conditions. Pay down variable loans as soon as possible to avoid dramatic interest rate increases.StrategyDebt control strategy begins with lifestyle changes
