Eau Claire (R.W. Baird & Co.) -- Tuesday's Daybreak Interview will be all about how to use debt to your advantage.
What is the difference between good debt and bad debt?
Good Debt = Purchases appreciating assets and is tax deductible
Bad Debt = auto loans, credit card bills
What is the # 1 key to managing debt?
Avoid it in the first place Think twice before taking on new debt. The Lower the better.
Max = 36% of Net income, including mortgage
If a person has multiple loans, which one should they pay off first?
The one with the highest interest rate should go first. Also, ones that are non-tax deductible.
Any ideas to help pay loans off quicker?
Make an extra payment each month. Round up your monthly payment to the nearest $100.
What is your opinion of Credit Cards?
They're a necessity to reserve a hotel room or buy things online, and they're convenient. You'll want to pay the full balance every month, and use automatic payments. Credit cards aren't bad, just the misuse of credit cards that is bad. If the money is not in your checking, don't use the credit card.
Do your homework before taking on any new debt. Continually review and look for ways to reduce existing debt.