We could all be better about managing our money in ways that keeps us from accumulating excessive debt and provides us with a cushion in case of a financial emergency. While there are surely some complicated financial maneuvers that could help you, there are also many simple debt management principles that you may have forgotten.

As a reminder of some of the simple things you can do to stay financially healthy, below are a few concepts and tips to keep in mind when managing your money and debt.

  • Keep track of what you spend. We often don't realize where our money goes every month. If you keep track of your purchases for an entire month, you might be surprised how much you spend on items you don't really need.
  • Some debt is okay. While many people worry about incurring any debt at all, you need to realize that not all debt is a negative thing. Rarely can we afford items such as homes, vehicles, or education without taking on some debt. The important thing is to make sure this debt is affordable. We will talk more about how "good debt" can turn bad if you don't plan wisely in one of our future posts.
  • Some debt is bad from the start. There are certain times when taking on debt is simply a poor strategy. Going into debt for an item you don't need right away is usually a bad idea. Instead of paying interest on an extravagance, save up the money beforehand so you can pay in cash or pay off your credit card in full when you get the bill.
  • Pay off debts that charge the most interest first. You may have some debts that charge significantly higher interest than others. If possible, try paying off those debts first. The more you can save on interest, the more you can eventually put toward your lower-interest debts.
  • Don't pay the minimum on your credit card. Your credit card statement should show you how long it will take to pay your full balance if you only pay the minimum each month. Even if you only owe a few hundred dollars, it may take you years to pay off the full balance. If you can't pay your full balance now, at least make sure you pay more than the minimum so you make some progress toward full payment.

In our next post, we will continue with some additional money and debt management tips to remember.

Related Resources:

Money 101: Top Things to Know (CNNMoney.com)