Spooky illustration of money myths haunting good vs bad debt.

Why the Good vs Bad Debt Myth Is Misleading đź‘»

Debt myths can be just as spooky as any haunted house. Here’s why the concept of good vs bad debt doesn’t tell the full story:

  • Student Loans Aren’t Automatically Good
    While an education can be an investment in your future, loans with high interest rates or borrowed without a clear repayment plan can become a heavy burden.

  • Mortgages Can Be Risky
    A home can build equity over time, but borrowing more than you can afford, or not understanding your loan terms, can quickly create stress.

  • Credit Cards Aren’t Always Evil
    Used strategically, credit cards can build credit history, offer rewards, and provide protections. The danger comes from carrying high-interest balances.

👉 For more perspective, see NerdWallet’s take on good debt vs bad debt.

A Better Way to Think About Good vs Bad Debt

Instead of labeling debt as “good” or “bad,” think of it this way:

  • Productive Debt: Moves you closer to long-term goals (e.g., a mortgage within your means, a carefully managed student loan for a career with strong earning potential).

  • Unproductive Debt: Doesn’t add value and drains resources (e.g., high-interest consumer debt, financing items that depreciate quickly).

By shifting how you evaluate good vs bad debt, you gain control instead of feeling trapped by misleading financial labels.

How to Manage Debt Without Fear

Managing debt doesn’t have to be terrifying. Here’s how to handle good vs bad debt wisely:

  1. Know Your Numbers – Track balances, interest rates, and minimum payments.

  2. Create a Spending Plan – Budget intentionally so your debt fits into your bigger financial picture.

  3. Prioritize High-Interest Debt – Knock down credit cards or personal loans first to free up cash flow.

  4. Avoid Lifestyle Debt – Don’t borrow to keep up appearances or chase short-term happiness.

💡 Tip: Building an emergency fund, even 2–4 weeks of income, keeps you from relying on credit cards when surprises happen. That’s one way to keep “bad debt” from creeping back into your life.

The Bottom Line

There’s no magic spell to make debt disappear overnight. But by looking past the myth of good vs bad debt, you’ll make smarter decisions, build confidence, and keep your financial future from getting haunted.

It’s Time

Ready to finally take control of your debt and create a plan that works for you? Start with Budgeting 101: Build a Budget That Works for You and learn how to manage debt wisely, set up a personalized plan, and free up money for the things that matter.

Or, if you want a quick win, grab the Mojo Number Guide to discover exactly how much you can spend guilt-free each week, without debt holding you back.