Mananging Your Debt

Of all the topics you'll cover on personal finance in this course, learning how to manage your debt is probably the most important. The best way to manage your debt is not to borrow in the first place. But if you do have to borrow, you'll have to be able to recognize if it's becoming a problem. If you borrow too much, you won't have any money for savings or investments. You'll have a hard time getting money when you really need it, like when you buy a house or want to take out student loans for college.

Not only can it affect your financial life, having too much debt can affect your personal relationships as well as your health. It can limit your choices for work and take away time from other important activities like spending time with your friends and family. Debt is a trap that's difficult to escape from.

If, however, you find yourself with too much debt, there are places you can go to get help like credit counseling services or some other reputable agency that is licensed by the state. It is important to seek help as soon as you find yourself missing payments or making late payments consistently so that you can avoid defaulting on your loans and bankruptcy.

Bankruptcy is the last resort for dealing with debt issues since it has serious negative impact on your financial future and may not wipe away all of your debts. Seek legal advice and credit counseling before deciding whether to file for bankruptcy.