If you missed the first installment, take a few minutes to take the quiz
15 Questions – Are You a Compulsive Debtor?
http://www.debtorsanonymous.org/help/questions.htm
TYPES OF DEBT
Unsecured Debt
An unsecured debt is money that you have borrowed that does not have any specific collateral attached to it. Credit cards are one example of an unsecured debt. A signature loan is another example. The bank or lender can sue you if you fail to make payments and garnish your wages as recourse on the loan.
Secured Debt
A secured debt is a debt that has collateral that stands for the money. A mortgage, a home equity line or a car loan are all examples of secured debt.
GOOD DEBT vs BAD DEBT
Good Debt
Some of your debt might be considered an investment. You’re probably thinking, “How can anything as bad as debt be considered an investment!” If you took on the debt to purchase something that will increase in value and can contribute to your overall financial health, then it’s very possible that debt is a good one.
For example, a home purchase can be considered to be a good debt. Since homes usually appreciate in value, the mortgage loan you take out to pay for the home is an investment. Another example of a good debt is a student loan taken out to finance a college education. Earning a college degree usually means that you’ll make more money over your lifetime.
Bad Debt
Just like there is good debt, there are some bad debts too. When you use debt to finance things that can be consumed. This is the kind of debt that creates an unhealthy financial situation. Credit card debt is often considered bad debt because of the nature of items that credit cards are used to purchase. You should never accumulate debt to purchase everyday items like clothes or food. If you use a credit card for these types of purchases, you should pay the balance in full each month.
Debt used to finance a vacation is bad debt. Even though it might help you feel better and be more productive once you return, a vacation does not appreciate in value. Don’t use credit to pay for a vacation and especially don’t use it to pay for a vacation you can’t afford.
To learn more: http://www.debtorsanonymous.org/help/steps.htm
15 Questions – Are You a Compulsive Debtor?
http://www.debtorsanonymous.org/help/questions.htm
TYPES OF DEBT
Unsecured Debt
An unsecured debt is money that you have borrowed that does not have any specific collateral attached to it. Credit cards are one example of an unsecured debt. A signature loan is another example. The bank or lender can sue you if you fail to make payments and garnish your wages as recourse on the loan.
Secured Debt
A secured debt is a debt that has collateral that stands for the money. A mortgage, a home equity line or a car loan are all examples of secured debt.
GOOD DEBT vs BAD DEBT
Good Debt
Some of your debt might be considered an investment. You’re probably thinking, “How can anything as bad as debt be considered an investment!” If you took on the debt to purchase something that will increase in value and can contribute to your overall financial health, then it’s very possible that debt is a good one.
For example, a home purchase can be considered to be a good debt. Since homes usually appreciate in value, the mortgage loan you take out to pay for the home is an investment. Another example of a good debt is a student loan taken out to finance a college education. Earning a college degree usually means that you’ll make more money over your lifetime.
Bad Debt
Just like there is good debt, there are some bad debts too. When you use debt to finance things that can be consumed. This is the kind of debt that creates an unhealthy financial situation. Credit card debt is often considered bad debt because of the nature of items that credit cards are used to purchase. You should never accumulate debt to purchase everyday items like clothes or food. If you use a credit card for these types of purchases, you should pay the balance in full each month.
Debt used to finance a vacation is bad debt. Even though it might help you feel better and be more productive once you return, a vacation does not appreciate in value. Don’t use credit to pay for a vacation and especially don’t use it to pay for a vacation you can’t afford.
To learn more: http://www.debtorsanonymous.org/help/steps.htm
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