The Census Bureau reports that adults who are 35 to 44 years old have 25 percent more household debt than the next closest age range. For more and more thirty-somethings, student loans make up a sizeable portion of that debt and compete with other financial obligations such as buying and maintaining a home or building a family. With the average student loan debt now approaching $30,000, Wisconsin residents who are having difficulty balancing their competing financial priorities may be interested in some helpful hints.
Thirty-somethings must come to terms with the fact that they may not be able to pay their debt off quickly. Debt management does not have to mean debt avoidance. In fact, it may be desirable for them to incur still more debt, though not without keeping a careful eye on their credit history. Putting away a little something towards retirement now and again, for example, or establishing a fund for the children’s future needs will not make personal bankruptcy any more inevitable now and can significantly ease their economic burdens later.
An integral part of successful debt management is making sure to take all of the tax breaks you’re entitled to. Many debts actually have tax advantages, and everyone should learn which debts those are. In general, mortgage interest is tax deductible, as is the interest on student loans and some investments. This knowledge is invaluable and will help debtors to sensibly determine which debts to prioritize for quicker payment. Credit card debt should be eliminated altogether, since their high fees and interest rates are too costly.
Sometimes debtors need outside help. An attorney may counsel a client on whether he or she would be best served by filing for bankruptcy or suggest how to get relief through other means.
Source: Daily Finance, “4 Tips to Help 30-Somethings Manage Their Debt”, Dan Caplinger, August 13, 2013