#2: Be Impatient With Debt
It’s nearly impossible for a young adult of working age to avoid borrowing altogether. If you haven’t got student loans, you’ll probably need a car loan at some point — and you’ll almost certainly have to take out a mortgage for your first house. These kinds of debt are perfectly normal.
However, you should always be impatient to get rid of debt, because interest makes everything you purchase on credit more expensive. Credit cards especially are a killer in this respect, with their 14% (and often higher) interest rates. Hurry up and pay down your credit card balances first. Since our wedding day at age 23, Enid and I have always paid our credit cards in full, every month, to avoid finance charges.
Next, whittle down car loans and high-cost private college loans. I see no harm in carrying a home mortgage at today’s historically low rates, but you should limit your total housing cost — mortgage, insurance and taxes — to no more than 35% of your gross income, unless you live in an extremely high-priced real estate market. (See Tip No. 4.)