Difference Between Good Debt And Bad Debt
What are assets? What are liabilities? Well, assets are a useful a valuable thing, person or quality. They are similar to a bonus and a benefit so basically it is a good plus to your financial stability. Assets are also defines as property owned by a person or company, regarded as having value and available to meet debts, commitments, or legacies. Liabilities on the other hand are things for which someone is responsible especially a debt or financial obligation. Liabilities are also defined as legal obligations payable to a third party. A liability is recorded in the general ledger, in a liability-type account that has a natural credit balance.( http://www.accountingtools.com/questions-and-answers/what-are-examples-of-liabilities.html) Examples of liabilities are Deferred revenue, Income taxes payable, Interest payable, Payroll taxes payable, Sales taxes payable, etc. Examples of assets are mortgages, savings account, warrants, time deposits, etc. (http://examples.yourdictionary.com/examples-of-assets.html) A person that wants to financially stable will want their assets to outweigh their liabilities. In this case a person needs to save and invest their money and avoid bad …show more content…
Recently in High School every Friday my entire school set aside the entire day from academics to learn about different ways of savings, Difference between good and bad credit, financial institutions and much more similar to what I’m talking about now. What stood out to me was the different ways to save. Then I come to Georgia Southern and this topic is discussed again. I believe that because of this topic so frequently being brought up that maybe I need to start saving. But How? There are many ways to save and invest your money such as savings accounts, insured bank money market accounts, Certificates of Deposits or what I’ll call CD’S, Stocks, Bonds, Mutual Funds and Budgeting. People save so that on those raining days they could be stable.
The importance of saving and investing, avoiding bad debt and making such your assets outnumber your liabilities are so that you can be financially stable and can make the right decisions with your money. The importance of saving money have to do with security and safety, while other important reasons for saving money have more to do just with the practical aspect of trying to plan ahead for major expenses. Look at it this way it is always important to have emergency funds for the unplanned accidents that may occur in