Americans have accumulated $4 trillion
dollars of personal debt. This much debt is a dangerous trend. There
is no evidence that personal debt will decrease. Student loan debt,
alone, is $1.5 trillion dollars. This debt is akin to home mortgages
because they often require lifetime payments. Credit card debt is
more than a trillion dollars. This is maybe the worst debt of them
all.
We have to look at each type of debt
independently. Housing and college debt are, at least, an investment
in the future. A home can often be sold for more than its purchase
price. Student debt often leads to higher incomes in he future. This
doesn't mean either are always good choices. If you buy a house
larger than you can truly afford, odds are good that you will,
someday, face foreclosure. If you borrow $100,000 for a women's study
degree, chances are you will end up working in fast food. No matter
the type of debt, we must make wise choices.
My mom grew up poor and she was
terrified of any type of debt. She passed that fear onto me, but I
still fell into the debt trap. I got into the habit of buying on
credit at the local mom and pop store. This was common in the area.
They didn't charge any interest. When you got paid, you go there to
cash your check and they clear your your tab. Stores did this because
it was a way to gain more customers.
