Why you should (and shouldn’t) go into debt

Debt is usually looked at as a negative and let’s be honest, that makes sense. Debt can be a huge burden that can take years to pay off. But is all debt bad? Can’t be! Here are some good and bad reasons to go into debt…

Education: School isn’t cheap so thankfully student loans are available. Education can be the path to your dream job. There are tons of benefits to getting more education, so trading a little debt for it is probably worth it.

Gratification: You may be tempted to take on some debt in exchange for something that provides immediate gratification (like a trip or experience) but after it’s over, all you’ll have left is the debt. It’s probably a good idea to save up for any pricey experiences you’d like to have.

Mortgage: Most people don’t pay cash for a house, so if you want to purchase one, you’re going to have to take on a mortgage debt. The beauty here is that you can pay off that debt as part of your housing budget and in the end, your housing budget will get lighter and you’ll own a house.

Poor budgeting: If you’re living above your means, watch out. Charging a few things here and there might seem like no big deal, but when you can’t pay it off every month, you’re asking for trouble.

John Pettit

John Pettit

John Pettit is the Managing Editor for CUInsight.com. Through news, community, press, jobs and events, he keeps credit unions digitally informed throughout the day. Web: www.cuinsight.com Details