Excessive debt can destroy your financial goals before you realize it

• One of the surest ways to sabotage your financial goals is to take on an excessive amount of debt.
• Just consistently spend a little more than you make over a period of time and you will eventually find yourself overburdened with debt.
• At that point, with much of your discretionary income going to make debt payments, you will typically find you have little or nothing left over to save toward your financial goals.
• n Using a mortgage to purchase a home can be a good financial strategy, since you are using debt with a reasonable, tax-deductible interest rate to purchase an asset that will probably increase in value over time.
• Don't purchase the most expensive home your lender will allow, putting the least amount down.
• Instead, make a large down payment and purchase a home that won't stretch your budget.
• Typically, you'll get a lower mortgage rate if you make at least a 20 percent down payment.
• You might want to set up a home equity line of credit to use for emergencies, not as a convenience.
• It may also make sense to use a home equity loan to pay off higher interest rate consumer loans, but then make sure you don't run up those debts again.
• Credit card balances typically carry high interest rates that aren't tax deduct-deductible.
• If you don't have the cash, don't purchase the item.
• Once you've consolidated as much as possible, come up with a plan for paying off those debts.
• Once that debt is paid in full, move on to the card with the next highest interest rate, continuing until all debt is paid in full.
• Face it, you wouldn't be in this situation if you didn't have problems controlling your spending.