Lesson 3b: Debt
Part of the reason that Americans are in so much debt is that they do not have a savings or emergency fund plan. Many Americans live paycheck to paycheck, which means that if any emergencies arise, they fall into debt. In addition, falling into debt is becoming easier with the use of credit cards. In the 1950's and 1960's, Americans had to pay everything in cash, and going into debt was difficult. Now with credit cards and access to instant payday loans, the stigma of going into debt has lessened. Americans can quickly get in over their heads in debt without even thinking. With such easy access to credit and instant cash, it is important to think cautiously about spending, to avoid going into debt.
So is all debt bad? Some debt in certain situations can be good (e.g., home mortgage or student loans), which are beneficial as a long term investment. What distinguishes between good debt and bad debt?
Basically bad debt falls into three parts:
Some of the other improper loans (bad debt) listed above are:
|Personal Topic : Self-Worth|
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