For many people debt is just part of life. Sometimes it seems that it is something that can not be avoided. There are times in your life when you may need to go into debt to purchase or pay for something, but you should limit these items to just a few. Debt can quickly take over your life and start a vicious cycle. Here are five items, which are more acceptable debt. If it is not on the list, don’t go into debt for it.
1) You will likely need to go into debt to buy a home. This is almost unavoidable. I do not personally know anyone who was able to pay for their first home without a mortgage. Although I do know people who paid for their second home completely from the proceeds of the first home. It is important that you only buy as much home as you actually need. It is also important to avoid over-extending yourself with the mortgage.
2) Many people pay for a portion of their education with student loans. It is important to keep these to a minimum. However having a degree can increase your earning potential, which will help you to be able to live a better life. If you are taking out loans, you need to stick to a monthly budget, and limit excess spending. Try to work during school and the summers to reduce the amount you need to borrow.
3) It is unfortunate, but many people end up having large amounts of medical debt to pay for. It is important to make sure that you have good health insurance, which will limit the amount that you will have to pay out of pocket. If a loved one becomes ill, you will want to do everything possible to help him get better.
4) Many people purchase their first car with a loan. This can be avoided in many instances, but not all. If you are purchasing a car, try to find one you can afford. If you can afford the payments to pay the car off in three years, then you can afford the car. If you can not, then you can not afford the car. Buying a used car is a better investment than a new one.