A lot of my friends have been coming to me recently for financial advice. A few years ago I started doing a lot of research on financial stuff and it's helped me to really improve my own situation and I guess they see as as some kind of financialpedia. (OK, that was lame).
I know in detail how credit scores work (and I check mine every 3 months), I know the basics of investing and even where the best interest rate on savings are. I take a vested interest in being as financial secure as possible.
Anyone who knows me also knows that I hate to owe anyone anything. Whether it be a friend who lent me some cash because I wasn't near an ATM or a "not so friendly" financial institution.
Granted at 24, I think I'm pretty good in the debt department. I have no credit card debt, only student loans. That hasn't stopped me from trying to getting rid of it as soon as possible though. I want to be debt free!
It then dawned on me that I'll forever be in debt regardless of how often I try to rid myself of it entirely; not because of a massive loan balance but because that's how we live. As soon as one debt is paid off, up comes another.
When I'm done with my student loan I may look to own a home. Obviously I'm not rich so I won't be able to buy the thing in cash, which means I'll have a mortgage for 15-30 years.
If I decide to start my own business in the distant future then I'll have small business debt. The simple fact is that debt isn't going anywhere.
Granted, there are some kinds of debt worth having, those being the main two that I have mentioned. Student loan debt is good because education enhances your earning potential and mortgage debt is good because you gain equity which is an asset.
Other things like credit card debt is bad because most of the things people buy with it aren't worth it. Clothing or electronics don't increase in value to balance out the interest and fees people pay when carrying a balance over an extended period of time.
Regardless, for most of our lives, many of us will owe someone or some institution SOMETHING. We just need to make sure we get something in return that's worth the hassle.
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