Six Keys to Successful Debt Management: Strategies for Avoiding and Managing Debt, Slides of Management Fundamentals

Download Six Keys to Successful Debt Management: Strategies for Avoiding and Managing Debt and more Slides Management Fundamentals in PDF only on Docsity! Choose Wealth #11: How Many Children You Have ¢ Balance your values, goals, personal life, and finances — and remember, children cost money. Plan on it! LIABILITIES ® Docsity.com Choose Wealth #12: Stay Married ¢ Married people tend to earn more and accumulate more than single people living alone or together. ¢ Income of divorced women with children is 40% of that of married couples. ® Docsity.com Six Keys to Successful Debt  Management  • Key #1: The Obvious: Spend Less Than You  Earn and Budget Your Money  – Use a budget to control spending and build  savings.  Pay yourself 1st!    • Key #2: Know The Costs  – Know the long‐term costs of borrowing and avoid  “high‐priced” lenders.  Docsity.com Six Keys to Successful Debt  Management (cont’d)  • Key # 3: Understand the Difference Between  Good and Bad Debt  – Borrowing makes sense when you can afford the  downpayment and the future payments, and the  purchase   • fulfills one of your goals  • outlives the financing  • provides a return that is greater than the cost (i.e., the  effects of depreciation)  Docsity.com Six Keys to Successful Debt  Management (cont’d)  • Key # 4: Make Sure You Can Repay What You  Borrow – Set Your Own Standards  – Apply the 28%, 36% mortgage ratios  – Apply the debt limit ratio    Debt limit ratio =      total monthly nonmortgage debt payments        total monthly take‐home pay  Docsity.com