Personal Finance News Thursday 2/21

Phil's Personal Finance Tip of the Day:

Is Your Debt Normal?

By Caroline Wright | Manilla.com 

At some point in our lives, we will likely have to accrue debt in order to pay for our children’s education, our home mortgage, or some other costly necessity (unexpected home repairs or medical costs). And that’s OK. In many cases, it’s good to have debt — it can increase your credit score, making you more attractive to creditors, help you build an asset base for retirement, or set you up with a future income. But what is considered to be normal debt? As with sweets and TV, debt is only good in moderation, and most experts say that your monthly debt should not exceed 36 percent of your total monthly income.

Good Debt

Good debt is any investment made into an appreciating asset or into something that is likely to yield a high return. Although not fool proof, investments in education, retirement, or home ownership are all considered good debt — if you can afford to pay it off. These are typically low-risk investments that tend to yield high ROIs. So long as you have the income to continue paying off your debt, you can ride out market fluctuations until it is the right time to capitalize on your investment.

[More from Manilla.com: Financial Tracking & Budgeting]

To read the entire article from Caroline Wright | Manilla.com:
http://finance.yahoo.com/news/debt-normal-130028611.html

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Hi my name is Philip J. Miano and I am the founder of PJM Personal Finance and Productivity Coaching specializing in Budgeting, Debt Reduction, Bank Reconciliations, Goal Setting, Time Management, and Organizational skills. Please visit my website: http://pjmcoaching.com