Where You Are Getting Your Money from Matters

Money is what makes the world go round, and that’s a fact of life.

In the United States, the pursuit of money is particularly high on the agenda of the everyday person. Cash greases the wheels so that we can buy what we want, provide for our loved ones, and enjoy our lives to the max.

Unfortunately, many folks simply don’t have the necessary financial resources to do everything that they need to do. Whenever there is a disparity between needs and resources, the concept of borrowing money comes into play.

The United States is notorious for borrowing. In fact, borrowing is essentially a way of life.

People borrow money to purchase a property, buy a car, pay for college tuition, spend money on weddings, travel or go on vacations, buy expensive jewelry, et al. Most of the time, its innocuous lending taking place – a couple of hundred dollars here or there to smooth the transition from one paycheck to the next.

Whenever you are borrowing money, you are incurring debt, and this is something that needs to be taken seriously.

Where You Are Getting Your Money from Matters

Are There Good Forms of Debt and Bad Forms of Debt?

Debt is debt, right? Wrong.

There are many different types of debt, some of them good and some of them bad.

For example, if you are borrowing to purchase real estate as an investment, or a home this is considered good debt. Likewise, if you are borrowing for the purposes of obtaining a college education.

Debt that is channeled towards the achievement of an appreciating asset, or an education is typically regarded as a net positive. A caveat is in order: wanton financing through credit facilities will land the borrower in hot water.

It is important to budget accordingly.

According to leading financial authorities, debt management can be tackled effectively if you employ the right techniques.

The average American household is in debt to the tune of $137,063. Of course, not all of this is bad debt. The good debt – a.k.a. mortgage debt – allows people to live a high-quality life that typically appreciates in value over time.

Despite this, many US households are desperately trying to get out of debt, and they simply don’t know how to do this.

US courts estimate that 750,000 people were subject to bankruptcy filings in 2016. This is a startling statistic and one which we need to focus on to better understand how debt can be managed.

Bankruptcy in and of itself is not a solution to a better financial state. Bankruptcy filings remain on your credit report for a period of 10 years. This can negatively affect how you are perceived by creditors when you are applying for credit.

In United States, the highest number of bankruptcy filings per 100,000 population occurs in states like Nevada, Colorado, New Mexico, Florida, Louisiana, Alabama, Mississippi, and Georgia.

The reasons for excessive debt are varied. A lot of the time, people incur debts due to unexpected medical bills. The majority of people typically file bankruptcy after they lose their jobs, or undergo traumatic medical events or emotional traumas such as a divorce, loss of a spouse or loved one.

Another common reason why people rack up debt is simple financial mismanagement: overspending.

Effective Ways to Cope with Debt Problems

Hindsight is always 20/20. However, there are many ways that people can prepare for eventualities so as not to incur debt burdens in their lives.

For example, putting away some money every month in a savings account, or under the proverbial mattress can help when problems crop up.

The funny thing about expenses is that they are always lurking in the shadows. Emergencies are going to happen, and they need to be financed. These include medical emergencies for yourself, your family, or your pets, automobile emergencies, cash shortages, possible loss of employment, etcetera.

When these events occur, it’s important to have a debt management plan in place to protect against them.

There are various techniques that people can use to cope with their debt problems, including debt transfer options from a high interest account to a 0% interest credit card, or simply taking out a debt consolidation loan at a lower rate of interest than the prevailing interest rate on the outstanding debt.

The best debt strategy is one which alleviates the debt burden moving forward. Cut expenses, save more, and be prudent with every penny that you spend!

Money Journey

Money Journey


  1. Fortunately there are good ways to cover unexpected expenditures. Keep insurances up-to-date, save money into the bank and invest in stocks, just to mention a few. Maybe the best one is your attitude: “I`ll manage in life in all circumstances”!

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