Free Yourself From Debt

Elle Kaplan
Aug 22 · 3 min read
Photo by Oscar Söderlund on Unsplash

For many of us, having some type of debt is unavoidable. Whether it’s a student loan, credit card balance, auto loan or mortgage, debt can help us reach our goals in less time. Debt, however, is not equal and how you manage debt can impact your life for years and years.

Don’t let your debt determine your financial security!

Good vs. Bad Debt

In general, most think of debt as something to avoid. While this is a healthy perspective, it is often not realistic. When preparing to take on debt, there are several factors that go into determining whether the debt will be a good debt.

1. Will the debt help you achieve your financial goals?
2. Can you get a low-interest loan?
3. What percentage of your income will be devoted to the debt?

Taking on low-interest debt that will allow you to increase your income or net worth while requiring only a small percentage of your income is considered good. Limiting the amount of income spend on debt payments will allow you to keep enough cash on hand to pay down your debt.

Bad debt is expensive and jeopardizes your financial security. Any debt with high or variable rate interest rates is often best avoided. High-interest credit cards, automobile financing, and personal loans for non-essential spending are debts where the cost of the debt can quickly outpace the value of what it’s financing.

Managing Your Debt

A top priority should be to eliminate debt. There are several approaches you can use to help manage debt so it is kept under control.

Know You Numbers

The first step toward managing debt successfully is understanding your total cost. The dollar value of what you purchased (or currently owe) plus the interest you’ll pay over time equals your total cost. Be committed to knowing that number each time you prepare to take on debt or pay it down.

Have A Plan

The simplest plan for managing debt is to pay down as much as you can each month. If you have multiple sources of debt, be sure to pay off the debts with with high or variable interest rates first. Pay as much on these debts while keeping any other financial obligations in good standing. Splitting payments on high interest debt (or any debt) into multiple monthly payments allows you to pay off the debt faster. Once you’ve eliminated high interest debt, pay off debts with the lowest balances. To successfully free yourself from debt, stick to your payment plan.

Change Your Attitude

If you chronically struggle to manage your debt, it’s time to recalibrate your thoughts about finances. Maybe this means making a budget for yourself (and sticking to it!), reassessing what you TRULY need versus want or taking on another job.

Start small, be kind to yourself and be proud of your successes.

Changing your attitude toward spending can prove challenging. It often means breaking bad spending habits and making sacrifices. Small changes are easier to adopt and become meaningful over time. You can experiment with implementing a budget for food expenses, switching to less expensive cable or media plans or consuming 1 drink socially instead of 2 or 3. Experiencing success with small changes can inspire you to do more to take control of your finances.

Debt can be stressful and may quietly take over your life if it is left unmanaged. When considering a loan be mindful of your goals and have a plan for paying off the debt. Don’t underestimate the power of choosing to control your debt!

Call to action

Do you think my tips were helpful in re-directing your focus and goals? Please share the article and shout out to me on Twitter!

You can also check out my firm LexION Capital for more tips on how to grow your wealth and become financially secure.

Elle Kaplan is the founder and CEO of LexION Capital, a fiduciary wealth management firm in New York City, serving high-net-worth individuals. She is also the chief investment officer and founder of LexION Alpha.

Elle Kaplan

Written by

CEO/Founder of @LexionCapital & CIO of LexION Alpha. Self Made Entrepreneur, Financial Expert & Dreamer. Visit to learn more.

Welcome to a place where words matter. On Medium, smart voices and original ideas take center stage - with no ads in sight. Watch
Follow all the topics you care about, and we’ll deliver the best stories for you to your homepage and inbox. Explore
Get unlimited access to the best stories on Medium — and support writers while you’re at it. Just $5/month. Upgrade