Should I go in Debt?

I found a little article that listed the 3 good reasons to go into debt. It piqued my interest because debt is considered something to avoid. What could be ok to get into debt for?

The listed reasons to get into debt were a student loan, home loan or a business loan. OK, that made sense.

Three years ago I would have totally agreed. Yes, student loans will better your future and to invest into a student loan would be beneficial. Yes, home loans tend to be a sound investment. By the time you pay off the loan and likely sooner, they *probably* would have increased in value. Yes, loan for a promising business sounds wise too.

How about today? Does that hold true?

In the New York Times, there was an article noting “how tuition and fees at public and private universities have risen this year at more than double the rate of inflation, with prices increasing faster at public institutions.” Not only that but “the private loans, those not promised by the federal government, continued to be the fastest-growing form of borrowing in the 2006-7 school year.” Looks like a student loan is just as risky as any other loan so be wise in researching the costs of a student loan. I talked to a person last weekend that owes $90k from a student loan. He was going to law school but is trying to change careers. OUCH! There’s another friend that took out a student loan for court reporting. She still owes the $25K and changed careers as well.

Then there’s the home loan. We know where our real estate market is sitting. These days it’s gotten worse than buying a car and walking off the lot to find out that the car you just bought is worth hundreds of dollars less already. We have some friends in our neighborhood who took out a construction loan for a home they’re building. They’re not quite complete in the building process and the home appraisal came out lower than the construction loan. How will they ever get a mortgage loan and then, how much debt will they be in? You’re suppose to be able to get a home loan, sit on it for a couple years and be able to see some equity. It’s not happening right now.

Loan for a Business? I hear so many people right now getting out of their careers to find a more stable job. There are people looking for work and finding it hard to get back in the work force. People are moving out of their store fronts because they just can’t make ends meet with the rising costs of their overhead.

Right now, TODAY, nothing makes sense to go in debt. You know who are the people that aren’t affected by these times? It’s the people that have been wise with their money, wise with their credit, wise with their savings. It’s the people who are not spending more than they earn. The people who don’t go into debt because they need new furniture for their oversized home. It’s the people that pay off the debt they have and don’t get more credit cards to pay off others. It’s the people who haven’t gotten use to that darn credit card.

I’m not saying you shouldn’t pull a student, home or business loan. Just be smart about it, do your research and make sound decisions about our future money investments. Don’t get further in debt.