So what is the difference between bad debt vs good debt?

Bad Debt

Bad debt is anything that is incurred when you purchase it and it does nothing but accrue interest and adds no value to your life. For instance that big screen television that you got on credit last month is bad debt. Even though you may believe that you have to have that big screen television every month that you pay for it; no value is added to your life just by having that television set sitting in your living room.

Your automobile that you spend every month paying diligently is nothing but bad debt. Although we all require one to get from point A to point B. You should never get a brand new vehicle the minute you drive it off the lot it; it automatically depreciates in value.

Good Debt

Good debt is anything that you owe on that provides value to us or continues to appreciate in value. While no one likes to have good debt; there are some things that you most likely are paying every month that is good debt. Your home is considered to be good debt because real estate on the norm will continue to increase in value; of course it depends on the market.

Education is another thing that can be considered good debt; it will help you get a better job and make more money than someone who is not educated.

The main problem with todays society is that the ranks of bad debt continue to rise. More and more people are struggling financially because they tend to spend more than they make. It is possible to live debt free so that you can enjoy life and not have to constantly worry about where your money is going to come every month just to pay your bills.

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