Sometimes in life you come across things that just don’t make sense. On the surface, the distinction between good and bad debt falls in that discussion. All debt is bad, right?

Well, it might not be fun to pay off our debts, but without debt we wouldn’t have homes, vehicles or post-secondary education. No, the results of this type debt are good, it provides with things we can use.

However, there is debt that exists that can be harmful.

Laurie Campbell is the CEO of Credit Canada Debt Solutions, and she’s seen it all as Canada’s debt rises. The proud owner of a single credit car she pays off each month, Campbell teaches people to be smart with their money and exercise financial restraint.

Living Within Our Means

Institutions such as Campbell’s are helping people cope with their debt, but often this is a last resort once bankruptcy looms on the horizon. What can we do before it gets to that point?

1. Look into the future: When faced with a financial decision such as buying a new home, take the time to see yourself after the purchase is made. Do you really need to spend that much? Will you be able to live comfortably if you spend less?

2. Weigh Every Options: Even the options you think you don’t like – it’s worth it in the long run to put every possible option on the table and weigh the pros and cons of going a certain direction. Who knows, you might actually surprise yourself.

3. Create a Plan & Stick to It: When it all comes to it, bad debt is the debt Canadians aren’t able to pay off. If you’re comfortable with the payments a new vehicle is going to saddle you with based on your income, and you’ve checked off steps 1 and 2, then go for it. As long as you know what you’re getting yourself into, then you’ll be better prepared to make your payments and keep your debt manageable.

Things Happen

People lose their jobs. Unseen expenses arise. New bills are dropped into our laps. This is part of the decision-making process as well, planning for the unknown. No one wants to be house poor. Emergencies happen to people all the time and you need to ensure you and your family are prepared.

And as long as you’re prepared, healthy, manageable debt will be a piece of cake.