In life, there are upsides and downsides to most things - debt included. Debt is something that receives a negative connotation, but virtually everyone has some sort of debt. It seems odd to say there is such a thing as “good” debt, but there is. On the flip side, there is also “bad” debt, which should be avoided. Nobody wants debt, however, good debt works in your favor, while bad debt does not.
Good debt has the potential to increase your net worth or further you in life in some way. It’s typically low interest and will “pay off” in some way down the road. This includes loans for your education, for a business, a mortgage or other real estate investment.
Bad debt will drive your credit score lower and weigh you down.
When the year starts winding down, it’s always a good idea to review your current debt situation. Has it increased or decreased in the past year? Debt can come in all shapes and sizes, but the most common types of debt are student loans, mortgages, auto loans, and credit cards. There are also “good” debts to have and “bad.” In simple terms, debt is any money you owe, and it’s time to review where you stand financially!
Everybody has debt, it’s part of life, but make sure the debt you do have is not destructive to your financial health.
Anything that helps build your wealth or increase income over time is considered a “good” debt. This could be mo