Answers to 10 top money and debt questions
News from KFVS:

By Andrew Housser

When it comes to a topic as important as your finances, it’s smart to ask plenty of questions so you can make well-informed decisions. Here, we have answers to 10 of the most frequently asked money and debt questions.

1. What’s better: Paying off a high-interest debt or a debt with the smallest balance?

In the long-term, you’ll pay less by paying off your highest-interest rate cards first. However, several studies have shown that people have more success getting out of credit card debt if they pay off the debts with the smallest balances first; the sense of achievement from getting rid of a debt keeps people committed to their overall goal of becoming debt-free. 

To work on the debt with the smallest balance first, put as much as you can toward that debt while making minimum payments on all others. Once that small debt is gone, add the amount you were paying on it to the minimum you’ve been paying on the next smallest debt until it’s paid off. Repeat this process until you’re debt-free.

2. Should I borrow from family or a lender?

Generally, a lender may be a better bet, if your credit allows it. Relatives (or friends) and money often don’t mix. If you do choose this route, sign a letter of agreement that spells out a monthly payment plan…………… continues on KFVS

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