Debt. We all have it. Well, most of us that is. But, what is good debt and what is bad debt? is there anything as good debt? We all have heard that term “good debt”. After this article, maybe you will have a different view on the topic.
In the past, we have heard the term good debt to refer to things such as a mortgage, an auto payment, and student loans. These are the things that we need to move forward in life, but we cannot pay cash for them necessarily. Well, this is true, but can we?
I would agree to this in most cases. I know that my student loans I couldn’t pay for them upfront. Mortgages, most likely we cannot. Auto loans we cannot, as well. But, we often use this as an excuse to overspend on these items, and when we overspend, we extend out the payments to make the payments affordable.
What we need to be doing is learning to play on house money. Learn to live within our means. If we take out a loan on something, look to pay it off as fast as possible. Don’t let the banking industry make more money off of us than they should. That is interest that could be invested into your future, not theirs.
This “I can afford the payment” mentality is what makes a cell phone cost a week’s salary, a pickup truck, what used to be the cornerstone of commerce and industry in America, cost more than a year’s salary now, and cause all of these “bubbles” in our economy to happen all of the time.
We need to learn to live within our means and play on house money, our own money, not the banks. Believe me, your wallet with thank you in the long run!
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