Personal Debt Research Paper
Get Out of Debt Starting Right Now
Personal Debt
If you are in debt, you need to get rid of this financial and emotional nuisance as soon as possible. Never mind your credit rating. Do whatever it takes to become debt free and never borrow again. There is no financial advantage to having debt. In years past, there would be people who would talk about good debt and bad debt. Of course, good debt was money borrowed for investment purposes and was usually a mortgage for a home. We learned in 2008, when the real estate bubble collapsed, that you can lose a great deal of money by having a mortgage. But even now, there are those who would make an argument to have a mortgage versus renting, and some of these people can make a good argument. I sit
on the fence with this issue, but if you can pay a mortgage, plus property taxes and upkeep of the home and this amount of money is roughly the same or close to renting, then perhaps it is a good idea. But even in this case, you should only see a mortgage as being cheaper than renting, and no consider it an investment.
The mortgage issue aside, personal debt is evil. Never borrow to pay for anything. Whatever debts you have, you need to create a plan to get yourself out of debt. There are three good approaches to take, but which one is best for you is dependent upon your current financial situation. The first step is to figure out where you are right now. Write down all of your income for a given month, and then write down all of your monthly expenses. Remember to include those yearly expenses as well. Things such as car registration, you can simply divide by 12. Once you have this number, subtract it from your monthly income. If you are negative, you may want to consider bankruptcy. However, before doing this, look at any assets that you have that are not related to your retirement, your house or children’s education. If you have any assets left that are not being held as security for a loan, you might want to consider selling these items and pay down your debt. The idea, of course, is to get your monthly debt below your income. If this is not possible, you should consult a banruptcy attorney.
Personal Debt
If you are in debt, you need to get rid of this financial and emotional nuisance as soon as possible. Never mind your credit rating. Do whatever it takes to become debt free and never borrow again. There is no financial advantage to having debt. In years past, there would be people who would talk about good debt and bad debt. Of course, good debt was money borrowed for investment purposes and was usually a mortgage for a home. We learned in 2008, when the real estate bubble collapsed, that you can lose a great deal of money by having a mortgage. But even now, there are those who would make an argument to have a mortgage versus renting, and some of these people can make a good argument. I sit
on the fence with this issue, but if you can pay a mortgage, plus property taxes and upkeep of the home and this amount of money is roughly the same or close to renting, then perhaps it is a good idea. But even in this case, you should only see a mortgage as being cheaper than renting, and no consider it an investment.
The mortgage issue aside, personal debt is evil. Never borrow to pay for anything. Whatever debts you have, you need to create a plan to get yourself out of debt. There are three good approaches to take, but which one is best for you is dependent upon your current financial situation. The first step is to figure out where you are right now. Write down all of your income for a given month, and then write down all of your monthly expenses. Remember to include those yearly expenses as well. Things such as car registration, you can simply divide by 12. Once you have this number, subtract it from your monthly income. If you are negative, you may want to consider bankruptcy. However, before doing this, look at any assets that you have that are not related to your retirement, your house or children’s education. If you have any assets left that are not being held as security for a loan, you might want to consider selling these items and pay down your debt. The idea, of course, is to get your monthly debt below your income. If this is not possible, you should consult a banruptcy attorney.