Debt Part 3 - Good debt?Submitted by Helkie Financial & Insurance Services Inc. on July 15th, 2018
Did you know there's good debt and bad debt? Good debt would be investment debt like your mortgage or education. Something that, over time, will serve you well and advance your financial situation. Bad debt is spending money you don’t have to satisfy a perceived need that is just a want (trying to keep up with the Jones). The craziest part about the shame of debt is that you can control it! Hiding from it, denying it, excusing it are all sure fired ways to make debt worse. Debt isn’t a problem, until it becomes a problem and then it is a really big problem. What I mean is a little bit of debt is manageable. If you get too comfortable with debt and continue to put yourself in financial debt without a plan or ability to pay it back – well that is really bad debt. It impacts your finances, your health, your relationships and the choices you can make.
There are a lot of similarities between health and finance. You get what you give. There's good fat and bad fat. Good carbs and bad carbs. We all know you need to eat right and exercise to stay healthy. If we eat well all day, then binge at night – well we get fat or we aren’t fit. If you're doing 90% of the right things but getting into bad debt (binging), well you're going to get financially fat.
Take control. Understand what you need to do to get it under control. You're the only person who can do this. There is no magic fairy that will come into your life and wave their wand washing it all away. Your debt is your debt. Own it and taking control. Taking action is the only way to solve it.
Knowing is power!