Living a Debt-fee life is almost impossible at this point of time when the economic situation is hurting everyone’s financial moves. Most of us are into a number of diversified loans, the most important being mortgage. Most of us when go for loans, let debt get out of their hands, which is not at all a good move. According to the financial experts, your total monthly long-term debt payments, including your mortgage and credit cards, should not exceed 36% of your gross monthly income. 
Indeed, avoiding debt doesn’t mean that you should deplete your cash reserves for emergencies. The actual challenge is to learn which debt to go for and which debt is not making any sense, for example do not go for home renovation loan, if it is not much important at that time. Similarly, the next important skill you should learn is to manage your money wisely.
So Debt can be Good as well as Bad. It is good, if it is making sense and you are capable of making monthly payments. In other words, it is Good Debt if you are taking it for sensible need, and the payments are within your capacity.
On the other hand, Bad Debt has to do with the things you don’t actually need. So never go for non-essential debts. Especially, the worst form of debt is the credit card, since it has the highest interest rates.
Sometimes the decision to have a loan doesn’t hinge on how much cash you have but on whether there are ways to make your money work harder for you. If interest rate is low, compare what you’ll spend in interest on a loan versus what your money could earn if it were invested. If you feel you can get a higher return from investing your money than what you’ll pay in interest on a loan, borrowing a small sum at a low rate may make sense.
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