As the head of the household, it’s up to you to make sure that your family stays on budget. The rest of your tribe may not even know what your budget is. But because you make the most income, and you are in charge of paying bills, that has to be your wheelhouse. And in that position, if you are aware of the debts that you have, then you know how important it is to pay them off as soon as possible.
What are some of these debts that can accrue over time? Your home mortgage can be considered a liability. You could have ended up with credit card debt over time. Maybe your car loans and payments are monthly considerations. And it could be that your education loans or the school loans from your children are sitting there and accruing interest. All need to be taken care of.
When it’s time to buy a house, you usually have to figure out what your mortgage payments are going to be. As time goes forward and you understand property taxes and where your income is going to be steadily over the years, you have the opportunity to lower those mortgage payments or pay more off toward the principle of your house more quickly. If you have the extra cash, the more you pay faster on your home mortgage debt, the less you’ll have to pay in the long run.
Credit Card Debt
When you’re younger, you don’t always have the best credit card habits. As you get older, and especially if you’re in charge of the household, you need to fix that. You need to see what your credit score is, and if it’s not where you want it to be, you need to make better credit card habits your way of life. It may take some adjusting on how you spend your money, but after you get out of credit card debt, you’ll be much happier with your financial portfolio.
Car Loans and Payments
Then there’s the matter of car loans and payments. If you buy a more expensive car than you can afford, you will leave the dealer lot with debt. Unfortunately, this can be a drain on your resources for many years. Ideally, you can pay cash for a car, and then never have to worry about that aspect of paying it back again. This is one way to prevent your family from feeling the effects of debt.
The cost of schooling these days is absurd. But going to college may be a necessity for your career path. If you have old school debt or your children need to take out loans, and you take on that debt, you realize how much of your income it can chew up. Try to pay back the principal as quickly as possible, and that will keep you financially sound for many years of peace in your later years.