Financial Literacy Debt Series: Get Informed

Find out how annual interest rates, months remaining, monthly payments, and principal affect you every month. Make sure you find this information and use because not knowing could be costing you money. All of these terms are important to know for your financial well being.

Make sure you know the annual interest rates on all of you loans and credit cards. This will effect your monthly payment and your bottom line. You need to understand the interest rate to understand how much that adds to the total amount you owe and the amount of time it will take to pay off your debt.

Months remaining is helpful to know because it gives you an idea of when each of your debts can be paid off. This might also help you decide which debt you want to pay down first. It can also help you gauge how long you will be paying on the debt with making minimum payments or how much faster it would be with the “Power Down” method.

Monthly payments are important to know because then you know where you stand each month with payments. This will also help you create an accurate spending plan. The biggest reason to know this is so you know what money you owe so you can make your payments in full and on time.

It is also essential to understand the amount of principal you are paying toward each month. This will help you to understand the amount you are paying to interest each month. This is also important to know so that you can figure out how long it will take you to pay off the loan or credit card.  

Understanding these key terms and concepts is crucial to your financial health. There are no excuses because the information is out there, you just have to take the time to learn it.

For all of LearnKey’s Financial Literacy Month resources, visit learnkey.com/financiallitmonth