Most people contribute the word debt to something negative. If you’re in debt, it’s usually because you’re bad at managing your money and you’ve somehow ended up in the negative. You probably had to resort to loans to pay for something important, and that set you on a slippery slope that has plunged you into debt.

At least, that’s the stigma against people who take out loans and say they’re in debt.

Fortunately, it’s not as bleak as it sounds. There is such a thing as good debt despite what many people say. Before you start borrowing money, it’s a good idea to understand the concepts of good and bad debt because it could change your entire opinion on loans. In fact, you could go as far to say that being in debt is actually a positive thing if used correctly. But before you go apply for a personal loan and get yourself in trouble for misunderstanding this idea, here is some advice.

What is Good Debt?

Good debts can be characterised by good and productive uses of the money. For instance, if your car breaks down and you need to fix it so you can ferry your kids to school, then it can be considered a long-term investment for your future. Another example is taking out a loan in order to start a business. These are positive uses for your money because they serve as investments, which is the general idea that your borrowing should follow.

Thanks to sources like cashloans.co, it’s possible to look up all the different types of loans you can take out so you can fit the interest rates and terms to your needs. As long as you’re able to pay it back in a reasonable amount of time (or even make earlier repayments) there’s almost no reason not to take out a loan as long as it’s put towards something useful that can help you. Other good examples of good debt are student loans, mortgages and paying for child services.

What is Bad Debt?

Bad debt covers anything that is used to pay for your personal enjoyment and luxury. A week-long holiday to China paid with a personal loan? Bad debt. Purchasing a luxury new television that you didn’t really need? Yet another example of bad debt. Borrowing money to pay back other loans? That’s probably the worst thing you could do.

Bad debt is characterised by bad decisions. If you struggle to pay all of your bills at the end of the month, then you might be living a lifestyle that you really can’t afford. Perhaps you’re subscribed to too many entertainment services or maybe you eat out far too much. Good financial management will eliminate all sources of bad debt, but you need to be self-aware that you’re overspending.

If you’re still unsure if your reasons for getting a loan is good or bad, then this article from nasdaq.com has a couple of examples that you could follow. In short, make sure you take out a loan for a good reason, not a personal one for your own enjoyment.

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Despite all their partying and endless nights of fun, college kids actually have it rough – financially speaking, anyway. It’s a tough period as students have a lot to pay for, and not a lot of money to pay for these things.

As such, if you’re a student, here’s some of the best financial advice you’ll ever read:

Make As Much Money As You Can

The grind never stops – or at least it shouldn’t stop – during your college years. Any opportunity you have to make money, take it! You will need money now more than any other time in your life. If you’re earning while in college, you can start paying off some of your student loan debt while you study. This lowers your interest rates and means you have less to pay when you graduate. It’s also mentioned on businessinsider.com that the earlier you start to pay, the faster you can pay your debt off. Plus, it’s always handy to have some disposable income for college essentials.

Find a part-time job in the town near where you’re attending college, or look for jobs around campus. Some final year students will often pay other students to take part in research projects or to be test subjects for them. The way I see it, this is basically free money for a student, so you should do it!

Raise Your Credit Score

College is usually a good indicator that life is getting serious and it’s time to do some adult stuff. One of those things is raising your credit score. Do this during college, and you can leave with a very good score that opens your world to many possibilities.

You can raise your score in various ways, but there are two main ways a college student can do this. The first is to use a credit card responsibly to build up your creditworthiness. It’s mentioned on studentcredit.cards that some companies offer credit cards with low-interest rates specially for students. The second thing you can do is avoid going into your overdraft and taking ages to get out of it. This doesn’t make you seem very creditworthy, and your score won’t grow.

Learn How To Budget

I’m going to go out on a limb here and guess that most people haven’t budgeted before they go to college. You don’t really have any need to before then, your parents tend to take care of everything. Now, you’re on your own, and you have expenses to pay, and you want a social life too.

So, you have to learn to budget your money. Do the math, work out how much you have, how much you need to spend, and how much you’ve got left over. The money you need to spend is essential payments you know you have to make, such as your tuition fees and accommodation costs. What you have left over will be split up into food money, toiletry money, and so on. Stick to your budget, and you will make it through college without much financial trouble.

Don’t become one of the many college students that manage their money badly. Work on improving your financial life while you study, as well as setting yourself up for a less stressful financial life after college.

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If you’re thinking about getting your first ever credit card, then it may just seem like another way of spending money and making purchases. But in reality, and something that is often forgotten about, it can be much, much more. If you use a credit card wisely, it can help to give your credit score a boost. If you weren’t aware of that, though, then it could damage your credit score without you even realizing it. Experian.com explains that a credit score can be an influence when it comes to things like mortgages, loans, and even a new cell phone contract, you want to make sure that your score is a positive one.

So, what are the other things you should know before getting yourself a credit card? Here are some things to be thinking about or finding out the answer to before you commit to a credit card.

You Should Know What a Credit Card Is

It might silly, but you’d be surprised at just how many people think that a credit card is like a debit card. In the ways you physically use it, they are basically the same. But in terms of money, they couldn’t be more different. A credit card is like a small loan essentially, that you have been approved for. But you have to pay it off each month. Otherwise, it costs you more than it would have been if you’d used your debit card.

You Should Know Why You Want a Credit Card

If you’re looking to get a credit card, simply because you find yourself in your overdraft each month, then that is not the wisest of reasons to get one. If you’re looking to get it to help build a credit score and to practice discipline with money, then that will stand you in much greater stead.

You Should Know How To Budget

Again, in order to make your credit card work for you, then it is a good idea that you know how to budget. A credit card can be helpful when you don’t have money right now, but you have some coming in. You need to know your finances well, as well as being able to budget, to really make your card work for you. If not, it can spiral out of control, and the next thing you know, you could be looking at a site like consolidate.loan in order to help you to consolidate your credit card debt. So budget, know your finances and pay off your card as soon as you have the money to do so.

You Should Know About Interest Rates

If you are getting a credit card, then you need to know all about interest rates. What interest rate does the card you have, or are looking at, have? If you don’t pay off your card in full each month, then what will it mean for your finances? How much will it end up costing? A credit card only works for you, if you don’t have to pay any interest.

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Would you love a second home? A place that’s waiting for you when you need a break? Somewhere that’s totally different from where you spend most of your time? Your own private getaway where you can relax and unwind whenever you need to? I’m sure for most of us; the answer is yes. It would be fantastic to have a home at the beach or out in the country, ready for when you need an escape from city life. Yet, unless you are very well off, you probably think it’s nothing more than a pipedream. Ordinary people can’t afford to buy two houses, never mind run them. However, buying a second home might not be as difficult as you think. Here’s a look at how to make sure that you can afford the second home that you have always dreamed of.

Choose the Right Home

Buying a second home isn’t a decision that you should rush into. While it can be fantastic, it is a significant financial commitment. The first thing you need to do is create a budget. Be realistic about what you can afford. Then look at houses for sale that fit the bill. Owning a second home is a brilliant investment, but only if it’s a house that you can afford. Don’t let yourself get carried away.

Rent It Out

One way to ensure that you can afford your second home is by making it earn its keep. If ever there’s a time when you know you won’t be using it, rent it out as a holiday let. Alternatively, if you plan to spend most of the summer in your second home, why not rent out the first for city breaks? Airbnb is a great option when it comes to making money from your home without committing to long-term lets.

Rent Out Space

If you don’t like the idea of people living in either of your homes, why not rent it out as space? You could rent a spare room out for storage, or even lease out your parking space. This can be an excellent earner in city locations.

Remortgage

Remortgaging your first home is one way to finance buying a second. Just make sure that you can afford it and that you are willing to take on the long-term financial commitment.

Save

The best way to afford a second home without getting yourself into financial struggles is to save and buy it outright. Or at least save to pay your first mortgage off early before taking out a second on a new home.

Understand the Costs

Before committing to buy, make sure you understand the costs of two homes. The costs don’t stop once you’ve purchased the home. You also need to pay bills and insurance on it, and you’ll have to pay to travel there regularly. Can you afford it? Make sure it’s a worthwhile investment that you will get a lot of use out of.

Owning a second home could be a dream come true. It’ll also mean you’ve got more options when it comes to retirement, and a whole other source of cash if you ever need it. Look at your options carefully and get saving and you’ll be relaxing on the beach in no time.

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If you’ve reached the point where you have so many debts that you can simply no longer afford to make even the smallest minimum repayments, don’t worry and don’t bury your head in the sand! For sure, it’s a sticky situation to find yourself in, but if you take action now, you won’t be worried every time the phone rings nor will you need to worry that the repo men will turn up on your door.

Here are some of the best things you can do to sort out your situation when you can no longer afford your debts:

Evaluate Your Finances

Before you do anything else, it’s worth reevaluating your financial situation to make absolutely sure that there is no way you can afford to pay off your debts. If you can, for example, cut cable for a while or redirect some of your salary that usually goes into savings into paying off your debts, it will be worth it because your credit score won’t take a hit.

Call Your Creditors

If you’re confident that your current financial difficulties are only going to be an issue short-term,perhaps because you’ve been hit with an unexpected expenditure or the cost of heating your home has runaway with you, it’s always a good idea to get in touch with your creditors straight away. If you can explain the situation, and make clear that it will resolve itself soon, there is a good chance that they will work with you to come up with a solution that works for both of you.

Consider Debt Consolidation

Debt consolidation, which you can find out more about at debtconsolidation.co, is a great solution for those of you who are struggling to make your monthly repayments simply because they are so high. By consolidating all of your debts into one, if you do it right, the monthly repayments should fall somewhat, and you’ll be able to start tackling your debts once again.

Talk to a Debt Counselor

If things are so tough that you don’t think you’ll be able to make your repayments even with a little extra help, it might be worth taking to a debt counselor, like the ones at moneymanagement.org/, who will be able to analyze your personal financial situation and give you some ideas as to how you can proceed. If you go down this route, you will need to be totally open and honest with your counselor, sharing personal and financial details with them, so that they can really help you, but in the end,it is worth it because they are great at saving people who are drowning in debt and they are pretty good at convincing creditors to give their clients some slack too!

Bankruptcy

If all else fails, you might need to think about filing for bankruptcy, something you can find out more about at uscourts.gov/services, but this should really be a last resort. Don’t file for bankruptcy before thoroughly exploring all your options because you never know what might happen!

When You’re struggling to repay debt, you must act quickly to try and resolve your situation, lest the problem became worse and more difficult to deal with. The steps above will help you with this, so take action now!

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