Tips for Young Women on Paying Down Debt

With the gender salary gap getting smaller all the time young women today are making more money than before. With the increase in salary, there is a chance that young women today can end up in more debt than ever before. Here are some tips to help all the young women who have debt work toward paying it off.

Of course you need to work on paying off any debt you have, from say student loans. What you need to do when working to pay off debt is to make your regular payments every month. On top of that you need to figure out what debt that has the highest interest rate and pay more toward that debt. Then keep doing this until all of your debt is paid off.

Debt Snowball

Debt Snowball (Photo credit: LendingMemo)

Most experts agree that if you are looking to add some debt to what you already have, say you want a new car or are planning on buying a home, then you need to be careful. The experts recommend that if possible try to keep your payments on your debt be no more than about fifteen percent of your monthly income. This way you will still have money for the other bills you have, other necessities, and still have some money to put into various savings accounts.

Another tip that most experts agree on is that if you have credit cards you need to keep your balance low. While credit cards are able to help you to build credit, if used inappropriately used they can ruin your credit too. To get the best out of your credit card experts say that you should keep your balance at no more than twenty percent of your credit limit. This way you are not ruining your credit with huge bills, and you are still working at building up your credit.

If you can, you should pay more than your minimum monthly balances. Doing this will help you to pay off your debts faster. This also looks good on your credit score. It will also help you in the future should you want to take out a loan. The bank will see that you try to stay out of debt and make larger payments and they will feel confident that you will be able to pay the loan back. After all banks like loaning money to people who do not need it so they can be sure they will be paid back.

Young women today need to watch out for debt. They need to work on getting rid of any and all debt they have once they are out of school and in the real world. It does not have to be overwhelming when you are working on paying off your debt, but if you do not work at it, you could end up in an overwhelming financial situation.