Rein in Spending with Debt Management

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By Wayne Coristine

Money Mentors is a not-for-profit credit counselling organization that is dedicated to educating Albertans on debt resolution, the wise use of credit and unbiased personal money coaching.
For many people, debt is another four letter word they wouldn't say in public. While nobody likes being in debt, it's important to understand what debt is, how to manage it and when to seek help if it gets out of hand.
Believe it or not, debt isn't always a bad thing. Without debt, most people would never be able to buy their homes or vehicles or perhaps go to university to get their dream jobs. To better manage your spending, learn how debt works and use it to your advantage.

Secured vs. Unsecured Debt
When it comes to borrowing money, there are two key categories for the average consumer to know: secured debt and unsecured debt. A secured debt means having something of value attached to the debt. If the loan isn't paid back, the creditor has the right to take the asset as payment. For example, if somebody finances a car but doesn't make the payments, the financing company has the right to take the car.
Unsecured debt is a little different. The loan is based on the promise of it being paid back on time. The most common form of unsecured debt is a credit card.

More on Debt Management in the next issue.