Debt is a huge burden when it’s accumulated for the wrong reasons. Using credit cards to by the next big thing is never the way to go when it comes to being financially responsible.
However there are times when debt is ok. For instance, you want to buy a house. Yes it is possible to buy one with cash but that would probably take a decade if not more. So getting a loan for something like that isn’t a bad thing. If you can benefit from going back to school in order to be able to get a better job in the future, private student loans will also be debt that is ok as it may be impossible to pay a university outright.
A car loan also isn’t that bad because a car is a necessity for most people. Of course you should be getting it for it’s purpose if you’re going into debt and not necessarily because it’s the best looking sports car available.
And another time it’s ok to get a loan….a significant hit to your finances. For instance you lose your job and you’re about to be homeless. Getting a loan to cover your mortgage isn’t the worst thing you can do. Of course, you should have cut everything to the bone as far as your expenses.
Debt is everywhere and most people have it. But don’t let it take over your life.
Surprised at the state of UK consumer loans? View how quickly UK consumers accumulate debt with this live debt ticker.
This infographic is brought to you by QuickQuid