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SolveYourProblem.com
Article Series: Debt Relief & Debt Consolidation
I Want To Get
Rid Of My Debt...NOW!
The Debt
Free Lifestyle
Many people have been taught that you cannot
get ahead without debt. We are also inundated with advertising
telling us we can have anything we want. All we need to do
is put it on our credit card.
We have become an impatient society, we want it right now.
We have lost the ethic of working for what we want.
It is not how much money you make; it is what you do with
it. By living without debt you can actually have a higher income
since you are not paying out interest, you are actually getting
paid interest on invested money.
All debt is not created equal. We will classify them as good
debt and bad debt.
To simplify the classification we will say that good debt
is a loan for something that you could sell at any time and
repay the debt. This narrows down good debt to a home loan
and possibly a home equity loan.
A bad debt, of course, is a loan on anything that will lose
value.
Let's take a look at some debts that we would consider bad
debt.
Home equity loans are in the gray area. They could be considered
good debt if they are used to repair or improve your home,
but you would be a lot better off to just save up the money
for the project. Home equity loans become bad debt when used
for purposes other than home improvement or maintenance. In
other words a bad home equity loan is for anything that does
not add to the value of your house. Do not jeopardize your
home by taking out a home equity loan on unnecessary items.
One possible good use for a home equity loan is when the interest
rates are low. You can use a home equity loan to refinance
your mortgage. Home equity loans generally have lower costs
than conventional home loans.
We consider school loans bad debt. If you finish school, get
a good high paying job and then attack the loan like mad, a
school loan may work out. The problem is that there are too
many things that can go wrong. At best, even if you do graduate
and get a good job there are always a lot of other expenses
at this time in ones life. You are really behind financially
when you start your working life in debt.
Auto loans are bad loans that have become common practice
to us. We pay interest on a vehicle that will only be worth
one half of its original purchase price in five years. Lately
it has also been common for us to borrow more than a vehicle
is worth. We can trade a car in that we still owe on, and roll
that owed amount over into another vehicle. This gives us a
loan amount that is higher than the value of the car that we
drive away. We have lost our capacity to say NO.
Co-signing is a bad debt that usually and unfortunately involves
family. If someone cannot qualify for a loan at a regular lending
institution, they should not get a loan. The fact that they
can't qualify for a loan elsewhere should tell you that they
are a huge risk. Use this opportunity to teach them how they
can get what they want by working harder for it and delaying
the purchase.
If you want to get off of the debt treadmill, you must run
as far away from debt as you can. You cannot use debt to get
out of debt. Even if you do, you have not changed your habits;
you must change your lifestyle.
Click here to discover my current SolveYourProblem recommendation and choice pick for the fastest, easiest and best debt relief solution you'll find anywhere. Get it and reward yourself with more cash in your pocket.
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John Cook is family oriented and likes to
help people get off and stay off the debt treadmill and secure
the financial future of their family. You can read more about
securing your families finances at his website http://www.financeforfamilies.com.
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