Debt Reduction blog: 11th September 2008

There are two types of debt, good and bad. It really is that simple, broadly speaking there is personal debt and investment debt. Personal debt would be anything that is spent on assets likely to depreciate rapidly (some would argue housing belongs in there recently!) or that has no ongoing inherent wealth creation once used. If you were to say that with the two debt types they can be either good or bad then personal debt would lean to the ‘bad debt’ side, although it doesn’t mean it’s an actual bad debt in the sense that payments are being missed.

An example of this would be money spent on a car, clothes, furniture etc. with personal debt you should always try to ensure you have a good reason for incurring it in the first place, not simply out of ‘ease of use’. If your car broke down a new (new can also be second hand!) car may be warranted, a new car for the craic may be affordable but from a debt perspective its deplorable.

Then we get onto what …

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Debt Reduction Blog. What happens if you miss mortgage payments? August 16th 2008

A question we are sometimes asked is ‘what do we do if rates rise and we find it hard to make payments?’. The root of the answer lies in not getting into debt you may not be able to service in the first place, having said that the home of your dreams is not always going to be sold at a dream price and many people are feeling an increasing debt burden in 2008. This is down to a slowing economy, redundancies, increased margins on loans, and ECB rate increases.

Today’s post will have some simple tips about money management and ways to avoid bad debt. For a start you need to get a piece of paper and write down guaranteed outgoings, such as mortgages, personal loans, credit cards, groceries etc. If there is a hierarchy in what requires priority food comes first then further down the line debts, for debts (if you ever have to make that choice of which one not to pay) make sure you pay your mortgage first, and personal loans further down the line.

However, …

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