How to Get Out of Debt with More Money to Invest
Have you always wanted to use your money to invest? There are tons of exciting investment opportunities that didn’t exist in the past. Cryptocurrencies like Bitcoin and Ethereum aren’t just a way to make money; they have the potential to be at the heart of profound social and economic changes in the future. For all we know, crypto could one day become the new currency on Mars.
But before you can put your money into exciting investments like cryptocurrency, you need the money to spend, which means getting out of debt.
Getting Out of Debt with Money Leftover to Save
Paying down your credit card bill isn’t cheap, but the longer you carry a balance, the more you wind up paying overall. While you may want to make minimum payments and put the rest into something fun or a potential investment, what you wind up doing is paying the credit card company more money in the long run.
Your goal is to make sure you can get out of debt while keeping as much of your own money as possible. That means getting out of debt sooner and reducing those interest rates.
How Credit Counseling Can Help
Tackling debt on your own isn’t always the smartest option. You may want to talk to a certified credit counselor with a non-profit credit counseling agency about strategies for saving money on your debt. They can help you with things like:
- A financial assessment that looks at your income, living expenses, and total debts;
- Money management techniques like budgeting;
- And debt solutions such as a Debt Consolidation Program.
By using credit counseling services, you make sure you’re using your money smartly. The goal isn’t just to get out of debt; it’s to maximize your future ability to invest.
Pay Off Debt Before You Invest
It often makes more sense to pay off debt before you invest. High-interest credit cards, in particular, should be settled before you save or invest in speculative assets like crypto.
If you can get a rate of return higher than the interest you pay, then it makes sense to invest, but you’ll rarely find an asset that appreciates faster than credit card debt collects interest. Other factors can swing in favor of investing, such as matching investments from your employer, but by and large, getting out of debt first makes sense.
Take Control of Your Money
When you’re out of credit card debt, you have more control over your money. You won’t look at every purchase and judge it based on whether or not you should have put it toward your debt.
It also means you can take on higher risks as an investor. If you invest money while you’re in debt, every loss hurts twice as hard. But when all of your money is your own, you can afford to ride out the slumps and even buy when those prices are low.
Get control of your finances and get out of debt today.
This article has been published in accordance with Socialnomics’ disclosure policy.