Debt often means not understanding (or pursuing) financial options to minimize surprise costs. For example, we know of a couple that didn’t have an extended warranty on their car. And, they were hit with an outrageous bill when the transmission failed. They had minimal savings, so it put them into debt.

We have avoided this by getting car repair insurance. We have EasyCare, and it has covered mechanical failures that would have really hit our budget hard.

So sometimes, debt is caused by not knowing the financial options that are available.

Do you ever wonder if home prices would be much, much less if debt wasn’t regularly used to purchase them? What about cars? University educations?

As a measure of inflation, track the price of gold for the last few centuries and you’ll see that it was relatively stable until the US government went off the gold standard and began using debt to finance its pet projects.

Like I said, I still use debt, primarily for my mortgage, but I’m looking forward to not having a mortgage at all.

Regardless, debt indicates a lack of money and always indicates a lack of patience.

Sometimes even credit card debt can be reasonable: if your refrigerator dies or your pet gets hit by a car or your car needs urgent repair, then short term debt (paid back ASAP) can be useful. It is true, it is better to have six months cash stash but if one is young and newly employed or just come out of a bad time or whatever, we may not have it.

Seriously, debt is just not ALWAYS evil. Student loans allow young people whose can’t otherwise go to college to get advanced degrees, as discussed already, we can buy houses we can’t otherwise buy out right, we can finance hugely expensive projects (I have heard of later to be famous movies financed on credit cards.) To paraphrase the NRA, credit doesn’t hurt you, you hurt you. If you buy a bigger house than you can reasonably pay back (and when I say responsible, I am NOT talking about interest only mortgages and other nonsense) or if you use it to buy expensive toys you don’t need, of course you deserve to get into trouble. But don’t just say all debt is bad. It just isn’t true.