Ink Money.com
Bad Credit Card Interest and Smart Money Debt Like a House and Education
Sometimes, low interest debt is the best and only way to deal with a problem in the short term. The problem for many, is not having a reasonable payback plan, or just outright having no payback plan at all. This will not make the debt go away and it will haunt your financial future.
Debt combined with you money on a house or schooling can be a good investment of debt, or as I like to say, “smart debt”, if it’s taken with soundness. When we bought our first home, the house was a real train wreck. I knew a little construction myself, and it was a good thing I had a friend who had been in construction and the renovation business for years. He said that the house could be fixed with 500 man-hours or so, guts, and of course, money. I borrowed the money for the renovations and mortgage. I then spent the next 8 months breaking my thumbs until they were flat and bleeding. I did have to get some more education from the hardware store pamphlets, and pay for some of the work to be done on the house to get it finished. In the end, we did better than we thought we could. But to this day, I still look at that first number of what the house would cost to fix, and I was not too far off from the number in the end.
After that, we sold the house, paid the helpful smart money debt back and the temporary credit card debt which had also low interest rates. We then moved out of town and put that money back in a another fixer-upper home. We still live in this house today, where I am focusing more on business education and teaching myself at home to save on education costs. One thing to note is that friends and family often do not understand someone that takes rest with money because of what they think you will loss. The true is that 95% will fail with out a good smart plan, yet even them there is on guaranty. When one is done with education, put the knowledge to work for you. For me this could not have been done, if it had not been for that first, hard, painful work. It is important to be very well prepared for a task such as renovations. There can be some very unpleasant, fearful surprises along the way to overcome. You will also have to find a way to push or motivate yourself sometimes, to get the many tasks done.
If you are thinking about building or renovations, you may want to try a smaller project such as building a dog house or a shed first. Then you can see how the small jobs go and decide if you really want to launch into a big project.
My advice is, take a deep breath and write a list of all the things that need to be done. This beaks the larger projects into bit-size pieces which you think you can accomplish in one day. Then hit one task on the list, at a time. Add to the list, as the new jobs come up. And cross the jobs off the list, as they get done.
There is satisfaction in a hard day’s work. And as you can see, all education does not have to be expensive. Smart debt can actually bring in a profit. The trick is to know the difference between good debt and bad credit card interest.
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Have you ever heard the wise saying of old, “ a dollar saved is a dollar earned”? Where did this saying take a backseat to today’s sayings of, “credit card debt is easy money and the worry is little…for three months, the interest rate will only be at 3% , then it will jump to 21% after that“? This kind of bad debt is just not healthy in the long term and should be avoided all together if possible.
