When I was young, dumb and full of life I always used to think debt was evil. I used to think once you get into debt that's it, your life is over. Well, after doing some growing up--and research--it turns out not all debt is bad. It all depends on what you do with it. Here are some not so smart ways to get into debt.
Credit Card Debt
Let's start with the obvious. Credit card debt is bad. Bad with a capital B. You don't stand to gain anything by racking up huge credit card debts. Well, actually you do, it's called interest. Huge debts on your credit card bill also stand to ruin your credit score.
Getting into debt because of a car should be a last resort. If you can't keep up with loan payments, you're in trouble. You won't get the original value if you attempt to sell and interest payments will still have to be made. So you'll be making payments without even having the car anymore!
Luxuries (clothes, vacations, etc.)
Taking out a loan to pay for clothes or a holiday is financial suicide. If you can't afford it, then don't buy it! If you're taking out a loan to buy a $100 jacket, think about the interest you'd have to pay. In the end that jacket could cost $130-$140.
Now that we've got the bad out the way, here is some good debt ideas for ya.
Student Loan Debt
Student loan debt is quite alright. Aside from the large amounts you have to borrow to pay for college if you don't have a scholarship, student loan debt can be some of the best debt around.
According to the U.S Labor Department, college grads earn $1 million more than high school grads over a lifetime. Student loans also have relatively low interest rates and they're tax deductible.
Just like student loans, mortgage debts are great because they have low interest rates and they're tax deductible. Mortgages allow you to buy a house which lets you keep more cash in your wallet. Just keep up with the monthly repayments and you'll be fine. After a few decades, you'll have the house to yourself.
This is probably the most difficult of all good debt. Largely because what's done with the money is up to you. You could take out the loan to invest in your own business. You could take out the loan to invest in someone else's business. Either way, you need to know your stuff before doing it. If you don't, you could be sitting on HUGE losses plus annoying interest payments on the original loan too.
If it won't go up in value or create income, it's not worth going into debt over. Going into debt to pay for your spring break vacation, new Balmain jeans or fresh Yeezys is not a good idea.