Good Debt vs Bad Debt

I know you have heard “Spend less than you earn” but how many of us actually do that. Sounds easy, but stats should that we are not spending less than we earn that’s why we are all in debt. There is good debt just like there is good fat. And on the opposite side of the coin, there is bad debt. I consider a mortgage a good debt, maybe even a car note. However, you should have a plan to pay off these types of debt in order for it to be considered as a good debt.

The number one problem I see is our relationship to money. You can’t love it and you can’t hate it either. Some like to ride the high. Meaning they spend until someone else cuts them off. Most likely that would be the creditor. If you like to ride the high you are probably in a world of debt. Some of us fall in the category of “recognizing and accepting”. We recognize our spending problems and just accept them. People in this category have just given up. The first step is recognizing. So, if you recognize the problem don’t just accept it, do something about it. On the flip side, there are people “finding”. Meaning trying to find help with their debt problems. These people will probably find a solution because they are looking for one. The best recommendation for those people in this category is knowledge. Don’t fall prey to the wrong solution. The final category is “freedom”. These people probably have gone through all the steps above be have arrived at “freedom from debt”.

Your relationship with money will define how your financial situation plays out.

Good Debt vs Bad Debt Wrap-Up

Ride The High – creates massive bad debt
Recognizing and Accepting – creates bad debt (person is unwilling to take good debt actions)
Finding – creates less bad debt
Freedom – The idea situation to be in a good debt situation

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Other Resources

• Inflationary Debt Prevention
• Online Budgeting Tools
• How To Transfer A Credit Card Balance
• Prepaid Credit Cards Information