If your consolidated loan allows you to borrow money again when you need it, use your rainy day savings to pay down that loan. This will reduce your interest costs, and you’ll still be able to access that money if you need to cover an unexpected expense. MAXIMIZE YOUR FLEXIBILITY Traditional loans have a fixed repayment schedule with little flexibility. However, for most chiropractors, financial needs are not quite so predictable, and having all your debt locked into a fixed payment product may be overly restrictive. Consider a fl oating-rate loan product that allows you to accelerate your debt repayment when you have extra money and re-borrow if your financial circum- stances temporarily take a turn for the worse. For example, a borrowing facility like this can work well should you be- come disabled and have to wait 90 days for your disability insurance to start. If you’re not comfortable having all your debt dependent on a fl oating rate, some products even allow you to split your debt into fi xed-rate and variable-rate portions. Maximizing fl exibility in your debts could allow you to be debt-free sooner and make it easier to adapt to any finan- cial rough patches you encounter. UNDERSTAND THE DIFFERENCE BETWEEN GOOD DEBT AND BAD DEBT Not all debt is created equal. “Bad debt” is often defi ned as debt used to purchase assets that will decline in value, such as a car or that new plasma TV. “Good debt” is debt that is used to purchase assets ex- pected to appreciate in value, such as your home or investments. In fact, if you bor- row money for the purpose of purchasing investments, you may be able to deduct the interest payments from your income on your tax return. (Tax deductibility is dependent on a number of factors. Always consult your tax and legal advisor). When creating a debt repayment strat- egy, tackle the bad debt fi rst. And, de- pending on your fi nancial situation and risk tolerance, you may even choose to take on some additional “good debt” as part of your broader fi nancial plan. (Bor- rowing to invest may not be appropriate for everyone. You should be fully aware of the risks and benefi ts associated with leveraged borrowing). CREATE A PLAN FOR DEBT ELIMINATION By allocating some extra money to debt repayment each month, you will not only get out of debt more quickly, but you could save a lot of money in inter- est payments as well. Build an extra debt repayment into your budget each month, beyond the minimum that is required. Or better still; look for a lending product that allows you to have your income au- tomatically deposited into the account. In this way, your excess cash automati- cally reduces your debt. By including a specifi c debt repayment figure in your budget, you’ll be regularly reminded of this goal – and you may be less tempted to spend the extra money each month. PREPARE FOR THE UNEXPECTED An important aspect of debt manage- ment is ensuring that you won’t leave your family with a fi nancial burden if Continued on Page 31 First Hands-free Ultrasound/IFC/ Laser Combo Rich-Mar AutoSounds™ are the first hands-free ultrasound machines available in combination with IFC currents and LaserPrism technology. AutoSound™ 7.6 with LaserPrism (shown above) 1 & 3 MHz Ultrasound w/HandsFree Ultrasound & Hammer Head 2cm & 5cm, Quadpolar IFC, Premod IFC, Russian current, High Volt, Microcurrent & LaserPrism 785 GaAIAs Laser Diodes. 1-800-561-0310 www.orthocanada.com 22 • CANADIAN CHIROPRACTOR | JULY/AUGUST 2009 www.canadianchiropractor.ca
Chiropractic + Naturopathic Doctor July/August 2009: Page 22
