The Three Step Approach to Honing Healthy Debt Management Skills (cont.)
Contributed by Kris Olds
But paying off the bad debt first and then the good debt will make a huge difference in the long run. And life is all about the long run, especially when it comes to financial health.
Step three of healthy debt management skills is the easy one.
The final step of a healthy debt management plan is avoiding being in debt at all. Now, there are clearly times where debt is unavoidable. Maslow's hierarchy of needs calls for safety, food and shelter above all else and debt is sometimes a way to make those things happen. But as mentioned above, assuming good debt, like a mortgage, can mean the difference between managing debt and having debt manage you. Assessing wants versus needs will help with the pitfalls of bad debt.
Before making a purchase, large or small, determine if it's a necessary purchase or if it's an impulse purchase. Keeping the end goal in mind, whether that is living debt free or living bad debt free, will help make those day to day decisions easier.
