11/05/2005

The best method to paying of debt is to do it

Today I read an article that I found quite interesting, which related to methods of paying off debt. While there are some strategies that can help pay off debt more efficiently than others, the author of the debt article stressed that the most important thing to do is just to start paying off debt! Although he suggested that paying off higher yielding debt can lead to saving more money in the long run, he also basically just highlighted that the most pressing priority should be just doing something, no matter how small it is. I thought that the author of this article had a lot of insight, and I agree with his opinions regarding one's consolidation of debt. In one of my economics classes, I heard the saying: "In the long run, we're all dead". While this phrase could be taken to an extreme, I think it illustrates an important point, that sometimes, little steps, or partial solutions are better than taking no action at all, and as it relates to debt, I think this statement also holds true.

4 comments:

Alex said...

I agree that if we have a problem, such as debt, the only way to fix it is to just deal with it and pay it off. I don't understand how people can keep buying and spending money if they can't afford to even pay off the debts they already have. If you don't have the money, don't buy it!

Connor said...

Realization of one's debt is the first step to correcting the problem. Next and equally important is taking action upon it. I am a firm believer that the best way to solve problems is to deal directly with them. Debt is not something that will magically disappear. I totally agree with you and the author. It seems like a common sense solution, yet there are people out there that do not understand it or believe that it will work.

maddy said...

Debt is something that economically will not only ruin us as individuals and families, but as a country. When we buy on credit not only do our wants change to needs at the drop of a hat, but the demand on our time increases also. We need more time to pay for things we didn't need in the first place, spending less time with our families and even the "toys" we thought would make us happier. Lending is a big part of the economic structure that allows money to be "created" and industry to grow, however I think there is a limit where people are so stretched financially because of their lack of wisdom concerning debt that the economy will face many problems.

Dr. Tufte said...

Paying down debt is a bit like filing things away - you can't wait for the perfect time to do it.

There is ongoing research in economics as to whether one of the problems with the assumption of debt it that individuals discount the future in a different way than banks do. There isn't a conclusion on this yet, but it would explain why people seem to get into problems that should be common sense to avoid.