How Do You View Your Debt?
You may have taken on debt to make ends meet or, conversely, been able to pay off your balances in full.
In either case, you likely see the debt as a negative thing.
Debt can be a good thing when it's used for purchases that give you long-term benefits or investments that will help you build wealth over time.
However, a growing body of research indicates that debt may not be good for your mental and physical health.
A recent study by the University of Wisconsin found that debt has a negative impact on mental health.
The study tracked 1,000 participants for 25 years and found that people with lower levels of wealth built up over time were less mentally healthy than those who had a higher asset base.
While it's not totally clear from the study why this is, the researchers suggest that people who have more debt are generally more stressed, which can lead to an increase in depression and anxiety symptoms.
A separate study published this month by Emory University also indicates a link between debt and psychological health.
The study found that the more debt people carry, the less healthy they are.
The research controlled for other factors, such as financial literacy and home mortgages, that could impact physical health.
The bottom line is that if you're carrying high levels of debt, especially if you're paying interest, then it's worth exploring ways to get rid of it.
Here are some tips to help:
● Consolidate your credit card balances onto a single card with a 0% introductory APR and pay off the consolidation loan within the intro period.
● If you can't pay off the balance, then at least switch to a card with a lower interest rate.
● Pay down your balances faster with biweekly payments or by adding extra principal payments to your monthly payment.
● Consider an auto loan if you need to purchase a car, as these typically come with lower interest rates than other types of loans.
● Shop around for the best mortgage rate and avoid taking out home equity lines of credit.
Bad debt is still bad debt, even if you're able to pay it off in full and have no balance on the account.
It will affect your emotional health and ability to lead a productive life.
In order to have a fulfilling life, it's not necessary to have all of your debt paid off.
In fact, the less you owe on your balance, the greater it may be able to help you provide for yourself and others. If you are in debt, consider these strategies for getting out of debt and improving your well-being along the way:
------------------------------------------------------------ A Good Debt Debt is something that's necessary and often appears in many business relationships. However, if something is a good debt then it will provide value that outweighs its cost. A debt that is bad for a person will also be a bad debt for a business. 2. A Bad Debt If you find yourself in debt, then it's probably time to evaluate what you have borrowed and how it has affected your life. You owe money to people or companies, most likely a bank. The more you owe the more they profit off of you, especially if they make interest on your money which they did not create. Every dollar you pay in interest is money that comes out of something else that could be used to help others.
3. Bad Debt Obesity is a leading problem in the United States. People are getting fatter, which means they are taking on more debt. This combination results in huge health problems and personal financial losses. If you have debt to pay off, then try to find ways to rid yourself of it first before you even start thinking about exercise and food. 4. Bad Debt When you owe money, it's called bad debt . No one wants to owe money, especially when there are no signs of the future being bright enough for your debt-to-income ratio to decrease. Instead of paying off debt, try to find another way to get out of it or negotiate with your debtors a better deal. In most cases they will be more willing to negotiate a shorter repayment period if you do not have the ability to pay off all that you owe. 5. Bad Debt When it's time to pay up on a loan or your monthly car payment, remember the acronym "TANSTAAFL." It stands for: There Ain't No Such Thing As A Free Lunch; You Owe It And You Have To Pay It 6. Bad Debt If you borrow money then there is some sort of benefit for doing so as long as you know what that benefit is before taking on the obligation. If you don't know the benefit, then maybe it is not worth the cost or risk. A debt is bad for a person or a business when it doesn't meet that benefit standard. You may have debt to pay off and you are burnt out having to work 80-100 hours a week for pay for your debts. 7. Bad Debt Debt might not be good in the long run but there could be some good advantages that are overlooked by those who are carrying high levels of debt. Keep an eye out and ask yourself if they outweigh the negatives. 8. Bad Debt Businesses need cash to make their business a success. However, if they have too much debt then they may be unable to pay off their bills. When you are running a business, ask yourself if you could afford to pay off your debt. If your answer is no, then maybe it's time to get some new accounts or find a different source of income that won't make you burn out by working 70 hours a week for your employer 9. Bad Debt If you owe money, there is always the possibility that people or companies might try to take advantage of you for your financial situation. If you don't have the money to pay off your debts or the funds to cover their demands, then you could be in trouble. Negotiate a settlement with people or companies that are able to pay what they want in return for giving up on their demands. 10. Bad Debt A debt is bad when it's too high and you can't afford it. Try different strategies to get out of debt as soon as possible by paying off some of your debt first before starting a new one.
Conclusion: Debt can be good and bad. If you have a high interest credit card debt and are paying yourself only 1% or 2% of your balance in interest, than I would consider this a bad debt to pay off first because the returns are so low. If you have student loans where you are earning 6-8%, then it might make more sense to keep that debt around and use any extra money to pay off your higher interest debts first.
Bad Debt is never good for anyone but what does it mean for your life? Bad debt is the result of someone taking something from you that doesn't belong to them.