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This last category can trip a lot of people up. Some look at credit cards as evil and some financial advisors would agree.
Credit cards should be handled with care, but they are not evil. It’s all about responsible usage. If your car breaks down but you don’t get paid for another two weeks, you can get the repairs now and pay off the cost within 30 days by using a credit card.
Once your budget is set and you know how much variable income you have left, you know how much you can put toward paying off that debt.
The same thing is with loans. Many people have to take out a mortgage for a home purchase. In this case, a loan is a good thing because it helps you obtain your home. This satisfies your need for shelter.
Sometimes houses will even gain value over time, and you’re able to sell the home and profit off the sale.
When we do take out a mortgage, we want to look at the big picture. What is it really costing me over 30 years? Are you able to make an extra payment to pay it off earlier?
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Image and article originally from thebrownreport.com. Read the original article here.