4 Surprising Financial Behaviors That Can Pay Off

There are plenty of myths, if you can call them that, when it comes to finances, maybe some that have gotten a bad reputation over the years that draw some to go against.  You may be surprised though in what you thought may or may not be true when it comes to financial behaviors.  Of course, draw your own opinion, as everyone’s financial situation is different; what makes sense to you might not make sense to me.

Pay Off Smaller Debt Balances for Extra Motivation

Experts have always said, and it seems like common sense, that you pay off the debts with the highest interest rates, otherwise you are wasting more than enough money on interest payments every month otherwise.  The thing is though, if you pay off the smaller balances first you can actually start to see progress because you will see the balance come to zero, maybe giving the feeling of an accomplishment and could be more motivated to continue to have a strong effort to pay off debt balances going forward, and may just be what you need for a little boost of effort.

Renting Could Be a Positive

There are plenty of positives to owning your home, such as building equity to hopefully one day pay off, or have the money in the house to do home renovations, pay for a wedding for vacation, but you can also write off property taxes on your tax return.  Renting has gotten a bad reputation in the past about throwing money away, but maybe it’s not all bad.  You’re not stuck in a 30-year mortgage, have the freedom to move around if you change jobs, and have a chance to check out city living in the downtown center of all the fun.

Not All Debt is Bad

While renting may be good for some, it’s not for everyone, and some renter’s hesitation could be that they don’t want to take on any debt whatsoever.  While that’s fine, but not all debt is bad actually.  A mortgage gives you a chance to build up your credit score while building equity in the meantime.  With interest rates still at historic lows, you don’t have to do the days of interest only payments to get by and you can really put a dent in the principal balance.  I mean student loans are debt, was that really a waste?  Well, hopefully not.

Closing Credit Accounts Could Hurt Credit Score

On the topic of paying off debt as mentioned earlier, if you are able to pay off debt balances and get them to a zero balance that is a huge accomplishment, but once you see the balance go away your first instinct might be to close the credit account.  That could actually be a mistake and hurt your credit when you close the account because if you have debt on other accounts, closing the account would rid you of this available credit and close the gap between your debt and credit lines combined.  You can actually cut up the card but keep it open and it would help your score.

Speak Your Mind

*