There is no good debt. I have heard (and read) many experts say that a good debt is one that increases in value â€“ like a home. The truth is that even those debts are ultimately bad for you and for your future.
1. Debt enslaves. You are forced into the terms of the lender no matter how your situation may change or what you may feel the need to do in the future. There is no way you can have complete control of your life because you are in debt (under control) of another.
2. Debt ensnares. Once you fall for the whole debt scenario it is only a matter of time before most people fall under its spell. Debt is easy and quick and provides instant gratification for needs, wants or desires.
3. Debt entraps. It looks good on the surface, particularly when you are dealing with things that are the so called â€œgood debts.â€ In the end you are caught in a cycle of financial obligation that only debt can draw you into.
4. Debt impoverishes. Interest paid on the debt is often enough to buy what ever you wanted in the first place. Debt eats away your extra income (or all your income) until you have nothing at all.
So how do you get away from the socially expected journey into the depths of debt?
1. Set AND FOLLOW a budget for you spending. Balance out what you make and what you spend so that you bring in more than you send out.
2. Be sure to put aside some money (no matter how small an amount) for savings for the big items that you want and then wait patiently to purchase those items (it may turn out that you donâ€™t want them after all).
3. Look at the finally total. Before you sign on the dotted line, look at what you will really be spending. Most people who buy mortgaged property today will never be able to recoup what they actually spend on that house when they buy using debt.
4. Trade up (when it comes to houses). Start with a small (ironically called in most places) â€œstarterâ€ home. Sell it and use the proceeds to trade up. Continue the process until you are in the home of your dreams.
5. Start now. The longer you wait to break free from debt the harder it will be.
Forget what â€œtheyâ€ say. Avoid debt with every fiber of your being. Teach your children to avoid debt. You will see that financial freedom will reap more blessings on you and your family for many generations to come.