Debt is money you owe. It's not that being in debt is a new idea or even a bad one. Debt allows us to buy homes and cars, send kids to college, and have things in the present that we can pay for in the future.
However, being in debt can be an overwhelming. There are smart, proven ways to manage your debt and MMFCU can help. Start with these three steps.
1. Calculate & Track Your Debts The first step in managing and reducing your debt is to make a list of who you owe money to and how much you owe them. Use this
Debt Log. Debt includes rent-to-own arrangements, credit cards, payday loans, student loans, and mortgages. The total amount you borrowed is your debt. There are other kinds of debt besides loans. For instance, your monthly electric bill isn't a debt, but if you're past due on your bill, that amount and any fees become debt. You can gather this information from your free credit report, bills, and loan statements.
2. Reduce Your Debt by Consolidating or Refinancing to a Lower Interest Rate Rates are very low, through consolidation and refinancing you may be able to lower your monthly obligations and simplify your debt payments. Refinancing a
mortgage or
auto loan that is even just a few years old can make a big difference. You can also consolidate debt into a
personal or
home equity loan. Call MMFCU at (218) 829-0371, we can help you determine if lower interest rate options are available.
3. You Make Lower Payments Once you consolidate or refinance your monthly obligation will be less than it is now — making your debt easier to manage. Paying down debt now frees up money in the future to spend and invest.
