Brad Reagan at Smart Money has advice on how to live debt-free. His article is really about how to get debt free, and it contains some useful tips.

Keeping your debt load as light and as cheap as possible is the key to a more secure future and to guilt-free spending on the things you need and want. It’s a skill that’s often neglected and seldom discussed, but understanding how to manage your debt will let you build wealth faster, and with less risk.

Disciplined saving and smart investing are the topics that get the most ink…but without a good debt strategy, the planning for your financial future can get awfully wobbly. The explanation comes down to Home Economics 101: Paying interest works against you in the same way that earning it works for you when you invest.

That last sentence is important: compounding can be your best friend, or it can be your worst enemy. The more you’re able to earn interest instead of pay it, the more you’ll get ahead. To that end, Reagan encourages three courses of action:

  • Carry only as much debt as you need.
  • Keep interest rates low.
  • Strive to become debt-free as soon as possible.

The article encourages accelerated payments on all types of debts — including mortgages. It also advocates eliminating all variable rate debt — credit cards, adjustable-rate mortgages, etc. — and moving it to products with fixed rates. Read the entire article for more tips on how to live debt-free.

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