For would-be buyers of retirement real estate, one of the most common pieces of advice is to pay down debt before seeking a mortgage loan. Now we have advice on the best ways to manage your budget so you can do just that. The tips come from Mechel Glass of CredAbility, guest columnist at the
Before you start paying extra toward debt, Glass encourages you to make sure they’re meeting their basic needs, especially the mortgage or rent payment. In her article, “
How to Pay Off Your Debt: Prioritize Your Spending Needs and Your Debt Payments,” Glass says that foreclosure may take months to occur, but that missed mortgage payments WILL catch up with you. Next, make sure you pay for your necessary expenses, including utilities, taxes and food. But food, according to Glass, doesn’t mean always eating out in restaurants or spending $3 on coffee. If your budget is tight, those things are not the best use of your money.
Insurance premiums for health, car and home should be next on your list of priorities, and after that, Glass recommends you start cutting. Do you need all those phones? Can you find better deals on your service? Can you do without cable while your working toward your financial goals? Glass suggests that you evaluate the places where you’re spending extra for memberships or premium products or services, and cut those things out.
Now that you have a little extra in your budget, Glass recommends paying extra each month on your lowest credit card balance while just paying minimums on other cards. When you get that one paid off, add that monthly payment to the minimum you’re already paying on the next lowest card.
Glass recommends nonprofit credit counseling as a last resort. These services can sometimes help you lower your interest rates or set up debt-management plan. She tells you more about it at the
Equifax Personal Finance Blog. You can ask her questions there, too, so check it out!