People seem to really enjoy the 1.0 series so far. As mentioned, sending me questions either in the comments or via email (TheLucesco@gmail.com) helps me tailor content for readers. Last week, I received two questions that I’d like to address:
Do you recommend cutting up your credit or closing the account altogether?
I don’t recommend using credit cards unless you pay off the full balance each month. If you are unable to pay off the full balance each month, then I suggest closing the account altogether. Better safe than sorry. You can build credit using other lines of credit (student loans, car, phone bill, etc.). You also don’t need credit to live; there are other ways that banks can evaluate your ability to pay when getting a mortgage or car loan. Using an emergency savings account, instead of a credit card, in the case of an emergency is the best option.
Do I work on debt or savings first? What are the steps to financial freedom?
Below are my 8 stages to financial freedom. I used these stages when I graduated from college in 2009 to get out of debt in less than 18 months and plan to get out of debt in about 2 years once I am gainfully employed.