I'm not the type to encourage
I'm not the type to encourage borrowing. But the truth is that sometimes debt can be a good thing. Mortgages and student loans are considered by many to be good debt. And in fact they are if we let go of the traditional thoughts on what debt actually is considered. A mortgage, for example, allows you to become a home owner even though you can't afford to pay for your home at once. Student loans allow you get an education with the idea of you falling into a rewarding career in which you'll earn a comfortable income to lead a comfortable life. And when either is amortized over a significantly longer period of time, the money you borrowed for college or to buy that first home ends up being a one of the best investments you can make.

I don't endorse anyone taking on debt that they can not responsibly pay back. However, I am in favor of sensible practical borrowing for particular situations that is consistent with your long term financial goals.

One of the pitfalls that you (and I) can make is to not think before you can borrow. I've foolishly taken on debt that I couldn't handle. This resulted me going into significant debt in tune of $10K due to living beyond my means. Seemed like a smart idea in the moment, but has cost me quite bit over time.

So, if you need to borrow, think before you decide to borrow and ask your self these questions first:

1. Do I need this instantly and will it instantly improve my life?

2. If I borrow now, will it restrict my ability to maneuver financially in the future?

3. How much debt can I handle without jeopardizing my present/future security?

If you seriously ask your self these questions before you borrow, you'll easily be able to tell when it pays to borrow and when it doesn't.

Article Source: //EzineArticles.com/6953948
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