Financial Accuracy

Good debt?  There is such thing as good debt?

The answer to this question depends on your willingness to work.  For most people, there is such a thing as good debt.  For those same people, “bad debt” is also a term with a specific definition.  Once you can distinguish between the two, you will see how you can start managing your finances in a positive way.

We all want the best things in our lives.  We want to be happy, but we want to have an abundant life full of lots of material things as well.  It is the American mindset.  Unfortunately, this is the cause of a lot of really bad debt.  When we go out and buy things that we don’t actually need, and we can’t really afford it, that is what bad debt is.  We really need to watch out for this and minimize it as much as we can.

On the other hand, good debt has to do with things that will help us out in the future or provide necessities in our lives.  When we go into debt in order to get a house or to get a car for transportation to work, this is a good debt.  Make sure you are conservative with these things, however.  You don’t need to have an extremely expensive car and house if you can’t afford to pay off the debt.  Get something you can afford.

One other type of good debt is for student loans.  It is said that a college degree increases your total lifetime income by $1 million.  That is a wonderful investment.

In order to put this into perspective, read this story that recently came out about a woman who incurred over $60,000 in credit card debt over 20 years with nothing to show for it.

http://www.msnbc.msn.com/id/31325093/ns/business-personal_finance/