Staying Away from Unnecessary Debt

by Justin Weinger on September 30, 2012

Just mentioning or thinking about the word debt is enough to make most anyone cringe.  No one in their right mind likes it, but it is something that almost all of us – at one time or another – are going to have to deal with.  However, if you know how to manage it wisely, and most importantly, don’t take on more than you can handle, you should be just fine.  We will briefly go over some of the basics of debt to provide you with a better understanding of it.

Once upon a time – centuries of maybe even eons ago – debt was assumed and agreed upon verbally or with a handshake.  But as mankind evolved it has gotten to the point where there are more forms than you can shake a stick at and various types of agreements that need to be signed.  Most people look at debt in two different forms; good debt and bad debt.  The good version is viewed as the kind you take on for things that are looked at as absolute necessities.

The first things that come to mind there are your home (shelter) and automobile (transportation).  Of the two of these the one regarding the mortgage is most susceptible to abuse.  This is usually done by taking out second mortgages or re-financing to pay for something unrelated to your home.  There are times when this is sometimes a good move, but that is another subject for a whole different article.

Bad debt is viewed as the kind one takes on when they are looking to purchase things that they want as opposed to need.  Of worse yet, when they are trying to keep up with others (commonly referred to as the Joneses).  This kind of debt should always be avoided.  That method of debt almost always leads to major money problems down the road.  A little here and a little there and before you know it you are in dire financial straits.  Then again, while I would advise against borrowing money that you don’t have, there are times when a short term loan is needed as well.  In extreme cash crunches I can accept same day loans online, they are easy to find and quick to approve.

So yes, there is some debt that will more than likely become necessary somewhere along the line in everyone’s lives.  But at the same time, there is also some that one should do their best to avoid at all costs.  Learning how to differentiate between the two, and never taking on more than you can reasonably handle will be one of the most important things you will do in your life, money-wise.  But the good thing is it’s not all that hard to do.


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