So, is debt always a bad thing? Is a small amount of debt acceptable to support your lifestyle and your quest to live the “American Dream?” 

Dave Ramsey, CEO of Ramsey Solutions, said, “the American Dream has morphed into a never-ending cycle of keeping up with the Joneses—full of cars, houses, degrees, and vacations we can’t really afford.”

As it turns out, many people do not have enough income to live without borrowing money to make ends meet.


Anytime you owe money to someone else—that’s debt. We’re talking about credit cards (even if you pay them off every month!), student loans, a mortgage, payday loans, personal loans, and car loans.


If you owe money on student loans, car loans, and credit cards, you’re not alone. The latest numbers from the Federal Reserve show that the total national household debt stands at a whopping $14.56 trillion. 

Student debt alone is over $1.7 trillion. That’s trillion with a “T.” There is no doubt that the average household has to spend a large amount of income to remain current with debt obligations.   

But even though consumer debt has become widespread across the nation, people still believe it’s just a normal part of life. 


Debt has a bad name because it can drain the resources you need to reach your life’s goals and dreams. You may be saving for that dream trip or adding to your IRA or 401(k).

However, if used wisely, debt can be a helpful tool to use in good ways. But, if not used properly, debt will be one of the biggest drains on your wealth.


Good debt is usually on something like education, real estate, or building a business. Interest rates are low, and you are typically earning a solid return on your money. (Your house’s value may increase, or your business will produce income.)

Bad debt, on the other hand, can crush you. Most debt is harmful if it has a super-high interest rate as a credit card or on a car that’s value decreases rapidly over time.


Credit card debt can chip away at your finances significantly. Especially if you purchase items that are considered “wants” and not “needs.” And with interest rates around 16%, it can take years to pay them off if you only make the minimum monthly payment.

Both good debt and bad debt can be stressful—and both types of debt can be more costly than they need to be if you don’t stay on top of what you owe and pay back loans efficiently. Many apps and internet-based budget programs are available to help you organize and manage your household finances.

While being completely debt-free is something to shoot for, carrying “good” debt can help you reach other life goals. Just remember to consider which debts will help you in the long run and which ones might set you back.

What if we said you can still pursue a life of freedom, a fantastic career, the dream home, and the retirement you didn’t even know you could have?

You can. But it starts with you. You’ve got to say I am tired of living paycheck to paycheck. You’ve got to stop using credit cards and using someone else’s money to support a lifestyle you can’t afford. You’ve got to stop signing your name on the dotted line for things that will take you longer than a lifetime to pay back.

Like Dave Ramsey says, “it’s time to pursue a new American Dream—a dream of being debt-free and living like no one else.” That’s certainly a plan that we should all want to pursue.


Larry Marvin

LifeCrafter Money $ense



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