Before you decide where you stand on the "pay off debt vs.
investing” debate, you need to be in a pretty stable place financially. After
all, if every cent of your monthly income is being spent each month between
mortgage/car payments, other bills and day-to-day living expenses, there’s
nothing left over to either accelerate your debt repayment or to put towards
smart investments for the future. It’s a worthwhile discussion to have,
however. Paying off your debts early means that you’ve got more disposable income
to save or invest, and you also get the peace of mind that comes from living
debt-free. On the other hand, investing early is a great way to maximize
returns, so maybe by following that route, you can end up further ahead, even
if you do carry debt a little longer. That’s why it’s so important that you get
a handle on your own monthly personal budget. By taking control of your daily
spending and saving, you can soon discover just how much money you’re bringing
in every month and be able to make the smartest decisions going forward.
One of the biggest problems people have with planning a
family budget is simply knowing where their money is going. With methods of
payment getting smarter, faster and less obtrusive, it can become harder to
realize what you’re spending and where. By keeping a strict and detailed log of
your daily spending habits, you can then tackle the problem from an informed
standpoint. Likewise, taking stock of your debt load is a must. Unsurprisingly,
creditors and other lenders are hesitant to go into too many details about the
real, long-term impact of the debt you’re taking on. By employing a sound debt
management strategy, you can really see just how long you’ll be working to pay
off that credit card or that line of credit. Armed with all of that
information, combined with the ability to make informed adjustments to your
day-to-day spending, you’ll be in a much better position to make, and stick to,
a personal budget plan.
Putting Technology to
Work for You
The old fashioned way of doing all of this would be with a
pencil, an eraser and a large, heavy ledger book. You had to horde receipts and
be able to access them whenever you needed, and keep track of myriad sheets of
paper piling up all around you. Thankfully, personal accounting software has
made those headaches things of the past. Ranging from simple to much more
robust and feature-rich, family budget planning software can do the heavy
number-crunching for you, leaving you to make the important, big-picture decisions,
with all the information you need right at your fingertips.
By using the right piece of personal financial management
software to organize your pocketbook for you and analyse exactly where you
stand from a personal finance point of view, you can take total control of your
household finances. Once you’ve done that, you can finally be in a position to
make the important decision and declare a winner in the "pay off debt vs.
investing” debate. More specifically, you’ll be in a better position to take
advantage of the fact that investing after paying off debt is almost guaranteed
to yield a better return. It all starts with taking control.