Is a critical component to be financially healthy. By learning what debt is and how it shows up in your life, you’ll be better prepared to manage it. The good news is, we have a short explainer video that covers debt. We also relate debt to something almost everyone can relate to; too much work!
debt is bad debt. While a bit more advanced in concept, building your credit score and credit history by RESPONSIBLY using some debt can actually help you save money in some cases. For example, if you spend years building up a solid credit score by taking (and paying) an auto loan, that can be good. On the other hand, if you get a credit card, max it out, and then don’t make your payments, that’s really bad!
We’re going to look at understanding debt at a basic, relatable level today. Things like credit scores, types of debt, and interest rates will come up in future Unmuddling money posts. For now, it’s important that you understand that debt is money owed to a person or company that is typically paid back over a period of time.
Check out this Understanding Debt video for a 2 minute explanation on debt and stay tuned for more Unmuddling Money videos and posts from Retiring by 45!
Check out this video to learn more about the Retiring by 45 Unmuddling Money series!
If you haven’t done so already, check out my Six Steps To Fire.