Debt
Your debt service payment is probably the biggest combined payment you make every month. And if you are like the average American, it is becoming harder and harder to keep up. Not to worry though, you have come to the right place to find out ALL you need to know about debt and how to manage it.
The sum of ALL the money you spend every month to pay back debt is called your Debt Service Payment..
If you look at a single debt payment it may not seem like much compared to your income. But...when you add them all up you may find that too much of your income is used to pay back debt. Let's answer a question and clear something up before moving forward.
What is debt?
Stop and think about it for a minute, what is debt? Debt is not what many people think it is. Cell phone bills, cable or internet bills and electricity or water bills are NOT debt. So if those don't qualify you may be asking yourself - just what is debt?
Simply put, debt is any money you get or borrow that you have to pay back. Money you don't have to pay back is a gift.
Here are some examples:
- Student Loans
- Credit Card Charges
- Car Notes
- Mortgages, and
- Bank Loans
These are all debts. Do you see how these differ from the bills mentioned earlier? That's right - you didn't borrow any money from the cable, utility or telephone companies so your payments to them are not debt service payments. A good way to identify a debt is to ask yourself whether it would normally appear on your credit report. If the answer is YES, then it's a debt.
Of course unpaid cell phone bills may eventually end up on your credit report. And that's right. They now become debts because you used the service, didn't pay for it and now you owe the phone company. So those unpaid bills become money that you technically "borrowed" and must pay back. In other words they now become debts.
You have a lot to learn about debt
Many people end up being overwhelmed by debts because they didn't learn the right way to handle debt. NOT YOU!
Even if you're indebt now you will learn how to get out and how to use debt the correct way.
Debt is a tool. Jjust like a screwdriver, saw or hammer you can use debt to build things. One of the things you can build with debt is good credit. Another is wealth. But first you nust learn to use debt properly.
The aim of The Debt Reduction Club is to teach you how to use debt properly.
Now you know what debt is
Someone once said that knowledge is power, but real power comes when you APPLY knowledge. You could know how to drive a car but if you don't get behind the wheel, start the engine and drive to work you may soon be out of a job.
Knowing what debt is, is certainly a good thing. Now you need to apply that knowledege to achieve your goal whether it is to ge out of debt, build credit or gain wealth. You will find information to help you achieve all of those and more on this site. Take some time to look around.
Bookmark this site and come back often to learn about debt, credit and get ideas on how to build wealth. If you'd like answers to specific questions you may have on any of these topics, please Contact Us and we will answer your questions for you.
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