Interest & Debt

Understanding the different types of debt can be an important step toward financial wellness. For example, expenses such as a mortgage can be considered “good debt.” If possible, you should limit other forms of borrowing, such as credit card debt. It is also important to understand the interest that accrues on your debt.

Follow these debt guidelines

Deciding how to spend or save extra money in your budget may play an important role in your overall financial wellness. Consider your options, including starting an emergency fund, paying off debts and increasing retirement plan contributions.

To help keep your finances on track and your debt under control, consider following a few simple guidelines.

1. Take on additional debt only for necessities, such as education, a house or a car.

2. If possible, avoid using credit cards unless you can pay them off each month.

3. Create a monthly budget to help track and prioritize your expenses.

Avoid future debt

An emergency fund may help you avoid debt by having money set aside in advance for unexpected expenses. A good rule of thumb is to save enough to cover three to 12 months of household expenses.

Debt Repayment Calculator

Figure out how soon you can pay off your debt.

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