Good Debt, Bad Debt
Author: Aimee
Good Debt
There are times when getting yourself into debt is a good thing. Good debt is when you borrow money to buy or invest in something that will end up making you money in the future. This money will enable you to pay back the amount that you borrowed and will increase your income or net worth in some way.
Bad Debt
Bad debt is when you borrowed money to buy things that you want to have, but these things don’t end up making you more money in the future; they will most likely lose value as time goes on. The best advice I can give you here is not to live above your means. If there is something that you want to buy, then save up for it. Don’t buy something before you have the money to buy it. That is what will end up getting you into trouble. Bad debt is a waste, it is pointless, and it will eat away at your chance for a wealthy future.
I really want to buy a car, and a laptop. Since I work from home most of the time and I have a desktop computer, neither of these are really necessary for me to have. I have had to control my impulse on many occasions, but I am really happy that I don’t have those extra bills weighing me down every month. For now it’s just not worth it.
Unless you are using debt for the right reasons, it will do nothing except keep your money flowing out of your pocket and into the pockets of others.
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[...] do you see how much your bad debt is costing you? The most important advice I can give you here is don’t live above your means, and [...]
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