Economic Wednesday

{Pat is unsure if he can be this committed to these semi-daily posts}

Does anyone read these?

In this week's economic Wednesdays I will briefly give my opinion on debt.

Personal debt to be more specific. Is it bad? Should we be scared of it?

First of all, no it is not 'bad', but yes we should be at least weary of it. Should we just completely stay away from debt in every situation? No. Debt can be helpful. It can be used as a way to give your self an advantage, such as with a college degree, or it can be used wisely in investment. Where we need to very, very weary of debt is when we would classify it as 'consumer debt' {Consumer debt is no good}. Your house..not consumer debt; your school loans...not consumer debt; your car...consumer debt. Consumer debt is really anything you buy that you could live without {That is in very simple terms}. You could live without buying a $30,000 car {Pat sure can}. You could live without that new boat, or new dress, or...you get it.

Consumer debt totalled $2.58 trillion in October 2008. This amounts to a debt of roughly $8,500 per person. It has risen since that date.

The big kahuna in consumer debt...the credit card. The credit card really does a number on Americans consumer debt and purchasing practices. It is not inherently bad, but it sure can be dangerous.

So....

Debt isn't the worst thing ever. But consumer debt can really cripple people and sometimes an entire country. Consumer debt isn't backed up by any sort of assets {Like a house would be}. Its in a league of its own and should be avoided.

So when you think about whether or not debt is bad in your own life. Consider what sort of debt your getting into. Thats the best way to figure out what the right choice is.

What do you think about debt? Whats the best way to handle debt in life? Should we get into any debt? Or should we try and avoid debt in all situations?

Pat