Three Types of Debt and How It Can Affect Your Finances (Episode 151)

Updated: March 22, 2023

Listen to this episode:

What you’ll hear in this episode:

Not all debts are the same. In this episode, I shared the three types of debt. Mainly, there are good, bad, and ugly debts.

If the money is used for needs, then that is good debt. If it’s for wants, then it’s bad debt. And if you borrow for want with high-interest rates, then that’s ugly debt.

The graph below shows how debt affects our finances.

Lastly, I gave some basic strategies on how to manage debt, such as the debt snowball and debt avalanche methods. Additionally, I shared financial tips to pay off your debts.

Excerpts and Highlights:

The differences between good, bad, and ugly debts may seem common sense right now, but things can quickly get blurry and confusing when you’re blinded by your wants.

Debt is a double-edged sword. It can harm and ruin your financial future, but when used properly, it can help you achieve your financial goals easier and faster.

Debt Management Resources:

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