Debt Consolidation Credit Counseling In Phoenix

If you have ever owed anyone money before, you know the burden it can have held over your head. Also, it depends on who you owe money to whether or not it is a burden or at least how much of a burden it is.

If you owe twenty dollars to your friend, probably interest free, you may feel less obliged to pay it back right away than if you owe a thousands dollars to an uncle at a 10 percent interest rate. It is not often that you borrow large sums of money from family and friends.

Even so, the money you owe to friends and family are rarely burdensome compared to other debts. It's the larger debts with high interest rates that are problematic. Credit cards are some of the worst with interest rates as high as 30% sometimes more. Also, it the debt can build up really fast because of the high interest rates.

So should you pay off your debt? Of course! Yes, ten times over. You should always work towards paying off your debt. If you have a family, you have an even bigger obligation to pay your debt off for your sake and theirs. The more debt you have, the faster it will grow.

Some say it's not important to pay off a mortgage or that you should even always have one because of the tax deduction. You can only deduct the interest you pay on your mortgage, and that's only a percentage. If you had no mortgage, you wouldn't have to pay any of it.

For instance, if you paid $3,000 for the year in interest on your mortgage and you were in the 20% tax bracket, you would only save 20% of that $3,000, or $600, not the entire $3,000. If you didn't have a mortgage, you'd save the whole $3,000 in interest.

You could say that you could invest what you aren't paying for your house at a higher rate than the mortgage rate and make more money. How many people actually have that money now and if they could save it, how many would invest it and not just go and spend it?

Even if you kept your mortgage and paid it off in 15 or 30 years, all your other debt should be paid off as soon as possible. Even better, don't take out loans for things you can't afford. A house is enough. Otherwise, buy used and save until you can buy what you want.