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BTN- Debt

May13

This weeks video was about debt and the difference between good and bad debt.

This is the video… click here

KEY:

Blue = Facts

Red = Understandings

Green =  Questions

Black  = More Information

Debt is when you borrow money because you can’t afford to buy something when you need or want it quickly. You borrow the money at the time to get what you need and pay back the money later.

If there was no debt how would that affect our lives?

Many different country’s borrow money and most end up being in Debt, even Australia…

That is because governments get loans from a bank to build things, to get better education and to help out with more happening in our country and our society.

Debt also makes you pay interest…

For some time now Australia is trying to work on not being in so much debt. The government is trying hard to get to a surplus which is where the government has money left over after paying for everything they need to.  It is difficult to get to a surplus because the government still needs to buy things to make Australia better. Although the government won’t give up.

This is where Good debt and Bad debt comes in…

Just recently Treasurer Scott Morrison has said, Australia should be looking at debt a bit differently as good and bad debt.

Bad debt is buying things on the internet and things you want for example

  • A non-managed credit card
  • Expensive car if you can’t afford it
  • money for a holiday
  • Jewellery or some precious figurines

Anything that you can’t benefit from. Thing you have to be careful before you buy.

 

And

 

Good debt is things you need that will make you money in the future and things you would need to live, for example

 

  • Houses
  • Infrastructure
  • Education
  • Car

Things that will give you more money in the future. Ask yourself “can I pay this back one day?”

 

Is technology good or bad debt? 

 

The government uses good debt for infrastructure because it helps people. Fountains, badges and fancy things are bad debt.

 

I understand the difference between good and bad debt. Good debt is when you buy something you can afford to pay back later and will benefit you in the future. You don’t use debt as an advantage to get new toys or clothes or something that entertains you. Then bad debt is when you buy something that has no purpose and it goes down in value.

 

If you’re prepared to be in debt think about this

“Can I pay for it later or will this benefit me in future”

 

 

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