Good Debt, Bad Debt: How Do You Know?
Not all debt is created equal. Believe it or not, there is such a thing as “good debt”.
Good debt is borrowing money for something that gives you value long-term, and maybe even gain value over time. Examples of good debt could be:
- a student loan.
- a computer if you use it to get a job or build your skills.
- a mortgage for an affordable home.
Bad debt is borrowing money for something that will lose value as soon as you buy it. Examples of bad debt could include non-essential items like:
- an expensive phone.
- a new vehicle.