Is Debt Always Bad?

This is a question that must be answered. Honestly everyone will have their own answer to the question, today I am going to share my opinion. Yes, I think that debt is always a bad thing. If you can live without debt you can build greater wealth, avoid unnecessary risks and are just better off in general. However, that doesn't mean that I don't think of certain types of debt as worse than others.

For example, I think most people (myself included) will find it necessary to borrow money to purchase a home. This builds equity over time, and is generally thought of as a good investment. It can be difficult to save up enough to purchase a home outright. However, you should be sure that you are purchasing a home that you truly can afford. Another more acceptable debt is student loan debt. This can help you increase your earning potential and better your life. However, it is too easy to borrow too much, and often people do not look into all viable alternatives before going into debt.

Car loans are right on the line. Sometimes these are necessary, but honestly they are best if you can avoid them. Saving up and buying them with cash will benefit you more over the long run. Buying used instead of new is better as well, so that you do not take as big of a hit.

As for consumer debt, it is bad. Credit card debt is bad, payday loan debt is bad, store credit accounts are bad. Do not put yourself into a position where you owe money that you can not pay back. It is much wiser to do without then to get into debt.

Over the years that I've heard experts say borrowing money to invest is okay, or that advocating for a debt free life is an extreme. The current economic crisis is a result of people and companies overextending themselves. Avoiding debt will put you in much better financial position than those who do not.

How do you feel about debt? Is it always bad?

• Get Out of Debt
• What Types of Debt Are Bad?
• What Types of Debt Are Good?