Saving, Managing Debt, and Budgeting

Managing Debt

Why is debt management important to an investor?

There are many reasons why managing your debt is an important component of investing. All debts carry some sort of obligation and fee associated with the use of the money. In addition to the principal that needs to be repaid by a certain date, so do all fees and interest on the debt. In order to repay this debt, money that would normally be invested from your current earnings must be redirected to pay off this debt. So you lose both the current earnings and the potential to earn more on this money if it were to be invested.


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