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.

1 comment:

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.