Here is an excerpt from the "A – Z of Personal Finance."
I used to think debt and any form of borrowing was “bad." Over time I have learnt to differentiate between “good” and “bad” debt. If you focus on good debt, even with the anxiety debt can cause, the knowledge that you are adding value and moving closer towards your financial goals makes borrowing make sense.
We all run into some financial challenges at some point in our lives. No matter how good you may be at managing your money, there will come a time that you may need to consider borrowing.
Borrowing can be a useful way to help spread out the cost of large purchases or expenses that we could perhaps not otherwise afford. It can also help us through difficult times or periods when the cash flows just don’t add up.
Sometimes it makes sense to borrow - sometimes it doesn’t. Sadly those who boast that they have never borrowed and will never borrow, may be losing out on interesting opportunities that could move them towards their financial goals.
Use debt as a tool; a means to an end. It can get you further along the road towards your financial goals. Give yourself some credit, but....be careful.
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