Is Any Debt A Good Debt?

Is Debt OK?

We talk a lot about paying off debt. We really hate high credit card balances because they tend to be for things that are not really tangible or long lasting, and those rates can really run out of control. There has been a lot of talk about the mortgage crisis, but I am sure that credit cards have gotten a lot more people in financial trouble with little to show for their expenses.

Emergency Credit

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Will Paying off Debt Help Finances?

I think that most of us ask ourselves this question from time to time. Will paying down loans help us in the long run? Of course, almost everybody I know would be very happy to be debt free, and owe nothing to anybody! But for most of us, paying off credit cards, car loans, and mortgages will certainly deplete the cash reserves we need for emergencies.

There is probably not one right answer for everybody. But rather than flipping coins or consulting the I-Ching, you can actually do some hard analysis on these questions. It is not that hard to figure out how you will benefit from paying down loans, and if it will be worth the risk.

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While I was hanging around on Yahoo Finance watching my stock portfolio bottom out, I did notice an article that looked encouraging at first glance. It said that US consumer debt has dropped a bit for the first time on record. i.e. for the first time, since they started tracking consumer debt, it has dropped. Now this should be good news that Americans are finally realizing that the future pain that debt gives them is not worth the quick satisfaction of a 50 inch TV set or something.

Is Declining US Debt Always Good News?

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So can you spare a buck a day?

If so, maybe you can apply an extra $30 a month to your credit card bill. If so, you will be paying to finance $360 a year less, which with interest rates approaching 27% on some cards can be substantial! This is especially true if you have only been paying the minimum balance and found that you are not getting anywhere trying to pay off your balances.

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Well, now there is no doubt about the fact that the US, and the world, is enduring an economic downturn. We have been watching financial leaders and politicians deny if long enough, but even they are admitting it now. However, as much as we are all struggling to watch our expenses and keep our savings, we do find that some people do ok during a recession, and some people even prosper! What is the difference between those that can barely survive the crisis, and those that make out ok? I think the difference is being, just like a Boy Scout, prepared!

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American Are Still Losing Their Homes

This is a pretty painful subject for me because I do know people who had to leave their homes. They did manage to land on their feet, and seem to be thriving in a more modest dwelling then they used to own. They did go through a crisis, but probably ended off better then most. But people, wake up, this crisis is not over. For some more gloom and doom see: US FORECLOSURE RATES ARE RISING.

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