How to get out of debt.

Welcome back to Part 2 of our Money Talks Crash Course. Today we're going to talk about something nobody likes, but everyone wants to get out of. Debt. And we're going to show you how to crush it. All debt is not created equal. So let's talk about the difference between good debt and un-good debt. Un-good? So how do you know if your debt is good? It has low interest and a fixed rate, like a student loan. Un-good debt, if left unchecked, can cause issues. So we want to handle this with some hustle. So what is considered un-good? Any interest rate that's flexible or over 7%. If it lingers, you could end up paying two to three times what you actually borrowed. And it could feel like it just keeps coming back. If your debt is between 15% and 49% of your income, you could do a little research and find a certified credit counselor who can give you tips, advice, and help you make a management plan. Now we know what kind of debt we have and whether it's time to bring in a counselor. So what do we pay off with a quickness? Start with anything that's in collections. Also, any urgent consumer debts, like credit cards, medical, and payday loan debt. Student loan debt can be intimidating if you have sky-high interest payments. But if you have an average credit score, usually 630 or higher, good income, or somebody who's willing to co-sign for you, refinancing could be a great option. I have excellent established credit, and I'm happy to be your co-signer. Rad. Thank you. Refinancing saves you money by replacing your existing student loans with a new, lower-rate loan. There are two methods of paying off debt. The first is the avalanche method. This is when you start with the highest interest debt first. You'll pay off debt faster and make serious short-term progress. The second method is the snowball method. You start with the smallest balance, and you work your way right up. This could take longer, but you're creating a habit. So that's a real win. How you shake off debt is totally up to you, and maybe a certified financial planner and credit counselor, because your situation is unique. But it absolutely can be done with a plan. I make plans to make plans. And that plan starts with a budget. So if you still need a little bit of help with that, go back to the first video for the full rundown. Thanks for watching Money Talks. See you guys next time with part three of our series, Money Talks. I'm good.