The Good Debt vs Bad Debt Debate

Is there such thing as establishing good debt? Well to be frank, no. You never want to owe people money, which is not usually a good idea. However that doesn’t mean that all forms of debt are the same level of bad. In fact, there are many kinds of debt that are less severe than others, the trick is trying to limit your debt to the kind that is going to do less damage on your bank account and your credit score. In the wild world of debt reduction you must always consider the long term effects of every purchase you make.

So what kinds of debt should you consider better than others? Well first of all, investments can be considered debt in some situations, but since they are investments you are probably expecting some sort of return from it in the long run. Money you spend on an education can be considered an investment because you are putting stock in your future even though you are burying yourself in debt right now. This is one of the reasons selecting the right degree is an important step, spending thousands of dollars on a degree you will not be using is foolish and a waste of time.

There is no doubt that getting into debt is almost always inevitable, but you need to try and find the least harmful form of debt possible. Reducing your debt is going to be one of the most important thing in your life until it is gone. This is why I continue to stress over and over that there is no form of debt you should covet or seek. All forms of debt are still debt, meaning you should do your best to avoid them.