Research how debt works, including the difference between “good” and “bad” debt. Write 2 paragraphs minimum on your findings.
Debt is money borrowed from a lender with the agreement to pay it back with interest. There are two main types of debt: "good" debt and "bad" debt. Good debt is considered an investment in your future, such as student loans or a mortgage. These types of debt can help you achieve long-term financial goals, such as obtaining a higher education or owning a home. Good debt typically has lower interest rates and can potentially increase your net worth over time.
On the other hand, bad debt is money borrowed for purchases that decrease in value over time, such as credit card debt used for unnecessary expenses or high-interest payday loans. Bad debt can quickly spiral out of control and lead to financial hardship. It is important to carefully manage and prioritize debt payments in order to avoid accruing excessive interest and fees. By understanding the difference between good and bad debt, individuals can make informed decisions about their financial health and work towards achieving their long-term financial goals.