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7. Saving Before Paying Debts
Some financial guru along the way encouraged people to sock away money no matter what the financial situation. However, we beg to differ. Consider this: if you are paying a higher interest on debts than the interest you are making on your savings account, then you are actually losing money.
It’s a simple math equation. For example: if you are paying 20 percent interest on your revolving credit card balance of $2,000 and your savings account is only making 2 percent, your money is much better spent paying off the credit card balance until it hits a zero balance. If you can’t pay it off in a couple of payments, then be sure to pay more than the monthly minimum – an amount that is intended to keep you in debt. Once the debts are paid off, you’ll have more than enough money to start creating your wealth account. Debt elimination is a huge step in creating wealth.
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