Radden Education Institute

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Debt Reduction

There is no such thing as ‘good debt.’ As long as one has debt, the person is not free. (If you doubt this, try skipping a car payment.) Even if the loan interest payments are tax-deductible, as with some home mortgages, it is still better not to have this exposure.

Rather, after securing adequate savings in an emergency/opportunity fund, usually about 20% of take-home pay should be applied to paying down debt — one way to rapidly increase net worth while maintaining some financial flexibility

Posted on Thursday, January 5th, 2012 at 4:38 pm under Resources.