3rd Quarter 2019

Strategies for Dealing with Debt

Start the new year without the drag of expensive debt by taking the following steps in the months ahead.

Prioritize your debt. Some types of debt take a much bigger toll on your personal finances than others. When deciding which types of debt to focus on first, consider interest rates, tax breaks, and repayment flexibility. Paying off high-interest credit-card debt should be a top priority. You might put paying off a low-interest mortgage with tax-deductible interest way down the list.

Tackle high-interest debt right away. Use our debt payoff calculator (www.icmarc.org/debtcalc) to see how increasing your monthly credit-card payments can save you money in interest.

Review federal student-loan repayment plans.You may qualify for a more affordable repayment plan based on your income. See https://studentaid.ed.gov/sa/repay-loans/understand/plans.

Plan ahead for extra expenses. Start setting aside some extra money now for holiday gifts and travel to avoid ringing in the new year with a big credit-card balance. In addition, build up your emergency fund so that unexpected expenses won’t lead to high-interest debt.

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