Financial Perspective:
There is nothing wrong with being in debt or using debt to reach a goal.
However, when the amount of debt and monthly debt service (payments) require more cash-flow than can be comfortably afforded, THAT'S when debt becomes a problem. You are then a slave to your creditors.
The key is to use debt wisely and not get over extended. There is a difference between voluntarily acquiring debt and getting into debt due to circumstances. But both ways can lead to the same situation - more debt than you can afford.
Look at non-beneficial debt as something to be eliminated, not tolerated. One type of non-beneficial debt is that which is not tax-deductible - such as credit card debt. The way to eliminate debt is to make amortizing payments (principal and interest). If there is too much debt owed to too many creditors, this is where debt consolidation can help. If cash-flow requirements can be reduced, this allows extra principal payments to be made - eliminating debt much faster.
Generally, less debt for a given income level equals less stress. Finances can be one of the biggest sources of stress in any household when there is more debt than the income can support. If finances are a stress-point, then it's time to review your situation, look at options, and take action to get things in order.
A difficult situation will not get better by itself. You must take action. The sooner, the better.
If finances are under control, invest to create wealth for you and your family. If you are looking to move ahead, then by all means consider purchasing that bigger home, vacation home, investment property and such. Great wealth has been created for those who invest wisely in real estate. Evaluate your objectives and options, and take action! |
