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TB MONEY MATTERS IS TAKING ON DEBT ALWAYS BAD? OR IS THERE SUCH A THING AS ‘GOOD DEBT’? SRIVINDHYA KOLLURU As high inflation forces dians to pile on debt to cover basic living expenses, it's important to know that not all debt is bad. Unfortunately, debt is unavoidable for many Ca- nadians, but there j is a dif- ference between what's considered "good" debt and "pad" debt. Jason Heath, certified fi- nancial planner at Objec- tive Financial Partners, ex- plains that good debt is when you borrow money to buy assets that tend to in- crease in value over time, which can help build wealth. That can include bor- rowing to buy a house, in- vestments or a rental prop- erty. Such loans often have tax-deductible interest, like when you borrow money to invest in stocks, bonds or exchange-traded funds (ETFs) in a taxable ac- count. Another example is pur- chasing a property for rent- al purposes. "The mortgage interest you pay monthly would be tax deductible against the rental income," explains Heath. In some cases, student loans can also be a form of good debt. "If you're bor- rowing money to pursue a program that willallow you to earn a higher income and has good job prospects, I would argue that's good debt," says Heath. Jessica Moorhouse, an accredited financial ci sellor and host of the More Money Podcast, explains bad ae is when you bor- row to that de- crease in 1 value over time, like most consumer goods — especially if that debt comes with high interest rates. Bad debt includes bor- rowing on your credit card, Bad debt is the kind that comes with high interest rates. which can have an interest rateas high as 20per centor more, and taking out pay- day loans, which can charge interest averaging a shocking 540 per cent on an annualized basis. According to Moor- house, unsecured lines of credit with interest rates above the current average of7 per cent are also consid- ered bad debt, and should be avoided. Moorhouse says people mainly resort to credit cards or payday loans be- cause they don't have suffi- cient savings. She says sav- ing up an emergency fund should bea priority to avoid bad debt. 2202'S} Jequerdes ‘epsinyy | es]ucayy oouereM | S Dreamstime photo. "There are times when people are going to go back- wards rather than forward in their journey tofinancial independence," says Heath. "But living within your means, budgeting, forecast- ing your income and ex- penses, even if it's just for a few months, can help you avoid surprises.” 4. Apply to jobs 1. Explore career pathways 2. Identify your transferrable skills 3. Get the support you need to succeed career navigation platform: Looking for help navigating your nextjob? [i Empower *your future of work* with Ontario's exp to: GPS for Your Career platform uses Al innovation allowing you to: Py & 4 In-demand career sectors: skilled trades, manufacturing, health care, technology, green jobs, and more! FutureFit Al, wit «all in 1 easy to use platform. Seriously Good Pizzas. Try some at your neighbourhood pizzeria 15 King St S, Waterloo, ON 519-954-1900 | famoso.ca eo 'e[D]UOIyDOOLETEM