If you've borrowed money, are paying off a loan or have an amount owing on a credit card, then you're in debt. However, as long as you remain in control of your debt, debt isn't necessarily a bad thing.
At Avery Gibson Financial Services, an important step in our financial planning process is to work with you to put together an expenditure budget. A budget is a simple and effective tool for working out how you spend your money and where you can find ways to save. These extra funds can then be used to build an investment portfolio, reduce debt or spend on a holiday or some other little luxury.
Not all debt is necessarily considered bad debt either. Depending on your situation, debt can be used in a longer term strategy to increase your wealth. Borrowing money to purchase growth assets such as shares or managed funds, or other investments which continue to appreciate in value and produce income such as investment property, can be considered "good debt" as it has the ability to increase your wealth over time and can bring with it tax effective benefits.
