Debt is Cheap!

Yes debt is cheap but should you use this to your advantage?  It all depends... Student loan, mortgage and auto loan rates are all going down.  This makes it super cheap to buy a new car or home and go to school on credit.  But should you take this chance?

I say NO! 

The lower mortgage rates make it easier to refinance your home or turn a bad loan product into a more reasonable one that you can eventually pay off.  That may be a good reason to restructure your mortgage debt and take advantage of the lower rates. 

The low student loan rates are good and provide a tax deduction but be careful.  Many people see this as "good debt."  I still see it as a trap.  You must be able to pay it back!  I see students with loans that will follow them around like a pet for years because their career choice won't support a quicker payoff.  Just because it is a student loan doesn't mean it isn't debt.  Payments must still be made. 

Also, transportation is necessary but a car loan is not!  Don't upgrade just because it seems cheap to do so.  You may regret it later.  Auto loan deliquency rates are up because unemployment is still up.  Play it safe right now and nurture the car you have.  I say... "love the one you're with!"

Budgeting is a sure fire way to see if you can afford to take on more.  Calculate your expenses, add up your debt and see where you stand.  Do not get sold just because the "payments" are affordable.  See if you can save up to upgrade your car.  See if you can pay for school as you go.  And finally, never buy a house simply because the interest rates are low.  Debt is still dumb and cash is still KING!