Although in many cases getting into a bit of debt is an unavoidable fact of the modern age, the massive amounts of debt that many Americans face ought to be able to be avoided, or at least lowered. Although there are many common-sense ways to stay out of unnecessary debt, enough people still make the same mistakes that it seems right to restate a few here. Avoiding debt begins with common sense and sound financial principles.
Avoiding Debt: Simple Rules
Here are a few basics that every American should have memorized. First, only buy what you can afford. Second, do your homework, and make sure you are getting the best price. Third, buy only what you truly need. A list like this could go on to a hundred and more, but even keeping these three tips for avoiding debt firmly in mind will go an astonishingly long way toward keeping you out of debt.
Not all kinds of debt are created equal. For example, mortgage debt can be good debt, because it is an investment in a piece of property with intrinsic value. Now, if you have mortgage debt on a house you cannot afford to make payments on, then that debt becomes bad debt. So being smart about what you can afford is always priority number one. And any way you slice it, mortgage debt is certainly a better type of debt than, say, credit card debt, which is valueless and linked to nothing.
Avoiding debt is sometimes an impossible undertaking, especially when considering the kinds of curve balls life throws your way. All the more reason to keep sound financial practices at the forefront of your plan for the future; then when the worst does happen, you will at least be in a position of relative strength, financially, to deal with the situation.