You won't hear me argue against the fact that helping family or friends who are in need is an act of grace. You will, however, hear me argue against co-signing a loan and/or lending them money if you can't afford to do so. No matter how wonderful your intentions are or how desperate someone is, you must think twice about co-signing a loan because my advice is to never co-sign a loan.
Money Lesson: Financial mistakes hurt nobody but you. Remember, money decisions are not emotional decisions. They are financial decisions.
PRIVATE VS. GOVERNMENT STUDENT LOANS
The challenge of paying back your student loans is very real and can be very confusing. But the one thing that is for certain is you have to pay them back so it’s important to understand the type of loan you have.
Money Lesson: Never defer payment on student loans. Student loan debt is the most dangerous debt of all as they can garnish everything from your wages to your Social Security income.
HOW TO CLIMB OUT OF DEBT
Debt is like cholesterol. There's a good kind and a bad kind. Knowing the difference—and managing both wisely—is the key to financial well-being. Many people want to find a fast way to get their debt under control. But quick fixes such as a debt settlement plan don't address the long-term issues. The three things you need to do are: 1. Address the real problem. 2. Don't move the problem around. 3. Adjust your attitude toward spending.
Money Lesson: If you are drowning in credit card debt, consider calling your credit card companies and negotiating a lump sum payment at a reduced rate.
PRE-PAID DEBIT CARDS
The way our economy works, you can't easily make do paying cash for everything. It's not safe to walk around with large sums of cash, and plastic makes online purchases a breeze. I am a big supporter of debit cards over credit cards. With a debit card you avoid the risk of running up an unpaid balance. But a debit card only makes sense if it charges you very low fees. And the sad truth is many pre-paid debit cards can be very expensive.
This information is for discussion purposes only. It is speculative and based on assumptions that may not be correct or complete. OWN: Oprah Winfrey Network and its affiliated entities and Suze Orman and her affiliated entities do not represent or warrant its accuracy. This is not a legally binding commitment and OWN: Oprah Winfrey Network and its affiliated entities and Suze Orman and her affiliated entities shall have no liability, and disclaim all direct, indirect, consequential, punitive or other damages, for the use of, or reliance on, this information.