Money and costs.

Jayco-noslide wrote:
To me there is no "smart debt". All debt is delaying the payment for something you can't afford to pay for. Actually, a home is as close to "smart debt" as most of us can get. I understand the reasoning behind having a loan at 3% and and investment at 7% and not taking the money out of the investment but still better off to use the payments going to pay off the loan to build up cash to buy something with rather than borrow. Then you can earn money on the cash saved and save on eliminating interest. Debt free isn't always possible but it is an attainable goal that pays big dividends.

X2!

In reality, the word and meaning of "debt" is the SAME as a servant or slave.

You can easily substitute the word slave for debt.

When you borrow the LENDER becomes YOUR "master" and you the BORROWER become a slave to the master until you fulfill the terms of the loan.. Once the terms of the loan has been met (IE payment in full including interest) you now become FREE of that master..

Most folks have no concept of the difference between "NEEDS" and "WANTS".

NEEDS are the basics like Food, Shelter, Clothing, BASIC transportation.

Within those needs you have things like rent/mortgage, water, electric, taxes, medical or any other expense that simply happens just to keep you alive..

WANTS are those things above and beyond the needs are not necessary to life..

Wants are things like expensive sports cars, fully loaded trucks/SUVs, cellphone(s), Internet, extravagant expensive housing, RVs, Boats, $7 coffee every day, $50 lunches everyday, $50 a plate dinners every night and anything else that is not needed to live.

YES, I realize there are times when debt IS necessary such as buying a house within your means or a vehicle within your means.. Those are things that often we simply do not have enough cash or income to buy outright.

I wish I could post some links to a free three part series on managing money.. I can't since it is from a "Biblical" perspective..

It really has some great tips on how to live life while keeping your debt (what you owe to lenders) to a minimum..

Some great tips on how to BUDGET (yeah, that bad six letter word know body likes)..

Take a challenge, for ONE month, write down EVERYTHING you buy, how much it was and what it was. Include housing, utilities, food, recreational and so on..

You WILL be shocked at the results of where you money truly goes..

Once you have tracked where every penny goes you can now decide what is NEED and what is WANT..

You really have to be HONEST and decide if some or all of your wants per month are more than what have AFTER the NEEDS are paid.

A great tip I heard was to take out enough cash to pay for basic food, clothing, medical, transportation (fuel/maintenance), OTHER (emergency or splurge).

Divide that cash according to your average costs per month for each of the above categories and place into envelopes marked for those needs..

The other money that is not drawn for cash is set aside to pay rent/mortgage, insurance, electric, taxes, ect.

Now, when you go shopping you buy only up to the amount in the envelope.. Once the cash is gone you then stop spending..

What you will find is you now do a BETTER job spending your money by spending it wisely.. Some categories may empty and some may have leftover.. Any leftover simply rolls into the next month and eventually you will have some growth..