Good Debt and Bad Debt

Good and Bad Debt

      It should not be necessarily the goal to live a debt free life. This is pretty unrealistic in todays world. Basically no one has cash to go and buy their house outright this also goes for vechicals as well as college education. So its not to say you should avoid all debt. However, it is a good idea not to let things get out of hand. An expert once said, not to let your debts be over 36 percent of your gross income.
     Keep this in mind, for it is very easy to go above what should be your spending limit especially when you don't keep tight records of what is charged on credit cards. You get the bill at months end and you can be in for a shock. Its amazing how many people have a credit card balance owing thousands and thousands and the amount of bankruptcies are resulting for this and other risky credit behavior.
    The goal of good debt vs bad debt is to determine what you honestly can afford, what you can't, what is basically needed in life and what then just is a luxury, a luxury mind you at a very high price if you can only afford the monthly minimum.
     Good debt could be seen as something you need but can do so without taking all of your cash liquidity. Also if you can afford the monthly payments you probably will not run into problems. See the first paragraph for some good debt examples.
     Bad debt, well that is much easier to define, anything you can't afford basically. Those debts that put you into a bind and that start to control you. Any debt in my opinion where you are only paying the minimum credit card payment is a bad debt because you will be paying big time in interest. You should check into a debit consolidation program, you can ask them any questions you may have, they are very helpful and have some good advice.