Friday, December 30, 2011

Preparing for 2012...

Tomorrow we celebrate the demise of another year. Was it a good year for you? What do you have left in your bank account, and is it spoken for by your Christmas debt?

Why do we go into debt? My ex-wife used to talk about "good debt" as if it benefited us to have an anchor around our necks while swimming with sharks. She was wrong, there is no such thing as "good" debt. The simple idea of debt means that you need to pay someone else more money for something you could not apparently afford. Any manner of discount you may have received is washed away by the fees and interest associated with borrowing. That doesn't mean there are not opportunities to leverage those 0% opportunities, but you should never catch yourself saying, "I'll have the money by then."

Save credit for those days when you need it, when the unexpected happens. I have debt, $5000. I could have less, but as it happens this was a bit of a surprise, so I borrowed money to pay for something necessary. Until December 2011, I was pleasantly growing a savings account.

Living within your means is important, to your future. I would like to wish you a Happy, and debt-free, New Year.