Debt is a pretty charged word, if you ask us. When you bring up debt into any conversation, chances are good someone is going to feel like you’re talking directly to them. But is that really the case? Are you really talking to them, or are you just remarking on the irony of life? It just depends on the conversation, we guess. The truth is that debt doesn’t have to be a dirty word at all. In fact, there are actually people that go into debt for all of the right reasons. Does that mean that debt is bad, or our idea of debt is bad? It just depends on your core financial blueprint. We’ll explain in just a moment.
You see, if you’re committed to a debt free lifestyle, you might find it hard to imagine that there are people that apply for loans all of the time, for all sorts of different purposes. Maybe you’ve worked it out that you could take that dream vacation and pay it back, since you have a stable income to do so now. Or maybe you’ve always dreamed of going back to nursing school and helping people. You have a lot of different options to choose from, and you don’t always have to worry about which option is going to hurt you the most. You need to think about which option is going to be the one that allows you to repay the loan over time.
For example, is a mortgage bad? Only if you cannot pay the mortgage off over time. The mortgage lender is trusting that you will be able to take care of your financial responsibilities. They are essentially taking a gamble on you, which is why the mortgage application process is so long. You don’t want to find yourself being unable to get the house that you’ve always wanted, gut you also have to think about a lot of beyond the horizon situations that might take away from your enjoyment of your home in the first place. For example, if you were to just get the most expensive home that you can afford, you’re always going to be worried about losing your job. Or getting sick. Or losing your spouse and then having so many bills that you cannot afford. That’s the honest truth — and a lot of homeowners are in that boat. You don’t have to follow suit.
We cannot stress enough the importance of a plan if you’re going to go into debt like this. Whether it’s going back to school or buying a home or even buying a car, you need to make sure that the debt makes sense for your lifestyle. Don’t go off of what your friends are doing. Friends are classically notorious for leading us to believe that they are on much more stable ground than they actually might be. That’s a recipe for disaster, if you ask us. Don’t think that you have to go through that at all — plan smart, plan well!