How do you feel about debt? Part Two
Part 2: For a recap of Part 1 please click the link here.
Personal loans are a quick and easy form of financing compared to a range of other options in the market. There are many reasons to apply for a personal loan and one of the more popular options out there is to apply for a loan to consolidate debt. Your personal reason for applying for a loan is entirely your own but whatever the motive, a debt consolidation loan can help you achieve your needs and wants, ambitious goals and aspirations.
Perspective #3 Debt allows me to make ends meet
This is for those who live in the payday-to-payday realm. The type who fall-back on debt to help them get by. For when we need to dip into debt to cover all the costs we are routinely faced with; rent/mortgage payments, power, internet, student loan repayments, petrol/transport costs, supermarket costs and any other forms of regular payments we must make. When this happens we want this to be a short-term gap. If not, it may mean a restructuring of our budget to help us rebound from debt and set us on the right track, once again.
Perspective #4 Debt provides myself a chance to make things happen
This camp is the one that aims to utilise debt to their advantage. Ideally, with a plan to control and manage debt once the ‘thing’ they are making happen, happens. This is the group that basically says why wait?, Now is the time to… Think of this like a once-in-a-lifetime overseas holiday. What about getting a student loan to cover education costs. Or even the chance to buy a home. Debt gives us the freedom to make these decisions, even from a young age. What is key to comprehend, is that management of this debt is vital and a plan must be established to determine whether the decisions we are making will be viable long-term options that will prove beneficial to us. And can we handle the repayment terms of the loan agreement. If there is hesitation or doubt surrounding this point, perhaps greater caution should be taken in your approach to taking on and then managing debt.
But then again you only live once and once an opportunity presents itself you’d be silly not to take on some debt and make things happen.
As one of our competition entrants coined it “debt can be leveraged to make money. This is good debt. Debt used for instant gratification is bad debt. Don’t fear debt, control it.” This is a fair understanding. Particularly the notion that debt should not be feared, instead controlled. This places control of debt into our own hands which is exactly right. We must take responsibility of the personal finance decisions we make and the consequential results and steps that follow.
Remember not all debt is bad. Good debt is an investment that will grow in value or generate long-term income – student loans are the go-to example here as you are using a loan to pay for an education and development of key skills and knowledge with the intention to find a job that will in-turn generate valuable, long-term income. Conversely, bad debt is the opposite. Carrying a high interest rate and debt incurred to pay for things that quickly lose their value are the main characteristics. Credit Card debt is a prime example here.
We hope the range of perspectives provided has given yourself a broader understanding and attitude toward debt. We are not saying that any one perspective is right, and another wrong. Instead an all-encompassing approach must be comprehended to help inform and shape our attitude toward debt management.