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Lauren's Updates

The following content originally appeared in an article by Amy Fontinelle on Yahoo! Finance on May 4, 2016. 


Pay down debt now or save:

Here's how to choose

 

Photo credit: 401kcalculator.org

When your liabilities include things like credit card debt or that loan you got from the furniture store to buy your couch, paying debt first can help you solve ongoing problems with managing your money.

"Not only is consumer debt high interest, but in my experience with clients, 99% of the time, consumer debt is created when lifestyle exceeds resources," says Lauren Klein, CFP professional, the founder and president of Klein Financial Advisors in Newport Beach, California.

Identify your real expendable income, create a budget based on that number and include paying down debt as a significant part of the equation, Klein says.

Paying debt first also makes sense because you're getting a guaranteed "return" by cutting your interest payments. It's typically more than you'll earn in the stock market and definitely more than you'll earn in a savings account.

Click here to read read the full article on Yahoo! Finance.

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Disclosure

All written content on this site is for information purposes only. Opinions expressed herein are solely those of Lauren S. Klein, President, Klein Financial Advisors, Inc. Material presented is believed to be from reliable sources and we make no representations as to its accuracy or completeness. Read More >