Debt is a fundamental aspect of modern finance, affecting daily spending and long-term financial planning.
This guide covers various types of debt, both good and bad, and their effects on our lives.
Financial experts provide practical tips on escaping debt and share real-life success stories.
Elyse Schwanke/The Penny Hoarder
What Is Debt?
Debt is money one party borrows from another, usually through loans or credit.
Repayment terms typically include principal plus interest.
Understanding debt is crucial to your financial well-being.
Debt can help you become a homeowner or send you into a spiral.
It depends how you use it.
We Dare You to Take Control of Your Debt
Up for a debt challenge?
In 10 days,these 10 practical stepscould help you get back on the right financial track.
Secured vs.
Unsecured Debt
This important distinction explains what you may qualify for and the interest youll pay.
But millions of Americans overlookthese easy tipsthat could help them manage credit card debt even more wisely.
Read moreto boost your credit knowledge and keep your credit score in check.
Timely payments and managing credit utilization can help maintain a good score.
In contrast, bad debt often involves high-interest loans for depreciating assets or unnecessary expenses.
Any debt can potentially become bad if it exceeds your budget.
You brew coffee at home, you dont walk into Target and you refuse to order avocado toast.
(Can you sense my millennial sarcasm there?)
But debt can quickly become bad debt if you take on too much or it has high interest rates.
Popular methods such as the snowball method or the avalanche method can help you tackle debt.
