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.