Good debt, bad debt…and how to tell the difference!

Good debt, bad debt…and how to tell the difference! good debt bad debt

Let’s face it, most of us will have debt at some point in our lives. As far as I’m concerned, there are two type of debt. One is what I’d call unconscious debt, and the other is….yes you’ve guessed it… conscious debt.

The unconscious debt is when we spend money on a whim, even if we don’t have it, and usually spend it on things that we don’t really need…but we want. The expense is usually unplanned, and we don’t really have a plan of how we’re going to pay it off. Does it ring a bell for you? Believe me, I’ve done it many times in the past. This is what I call ‘bad debt’, and generally not a good idea.

Then there is the conscious debt. That’s the debt we incur thoughtfully, and with a plan to pay it off. The best example of this kind of debt is investing in yourself and your business. Of course, in an ideal world, we would all have a year’s worth of expenses saved up, before we even started our businesses. But in reality, nobody would be in business if we waited to do that! Creating debt to grow your business is a strategy,  and can be a very smart one.

Whether you’ve created some bad debt, or have borrowed money to invest in your business, the important thing is to have a great debt payoff plan, and stick to it.

Here are my best three tips on how to handle debt.

Tip #1: Forgive yourself and those who owe you money.

Really? Yes, really. Because if you don’t, you not only create financial debt, but you also create psychic debt. So take a deep breath, and let it all go. You might need to take two or three breaths…and that’s OK too. Now don’t get me wrong, this doesn’t mean that you’re not going to pay off your debt, or ask for your money back. No, it’s just getting rid of that heavy and stuck energy of un-forgiveness, and allowing things to start flowing again.

Tip #2: Have a great debt payoff plan!

If you want to become debt free, you need to have a great plan to pay it off. It’s easy to go into denial under financial stress, and pretend that the debt doesn’t exist, or that it’ll somehow magically disappear. This ‘strategy’ just simply doesn’t work. You need to put yourself in control of the situation, and see the bigger picture. This will help you whether it’s a personal debt, or a business investment debt. The last thing you want to do is to contract, stop all investments and spending, and shrink in fear. This type of energy sends the wrong message to the Universe, and apart from everything else, is just no fun. There are ways of paying off your debt, while not feeling poor.

Tip #3: Keep investing wisely to create new income.

I want to bring back to your attention these three letters: ROI. Yes ladies and gentlemen, it is all about your return on investment. So spend your money wisely, have a bigger vision, and follow your intuition. When you tune in and trust your own judgement, then you’ll know what to do to create much income in your business through strategic debt. Once you start making more money, direct a portion of that new income toward paying off your debt.

In conclusion, there is such a thing as bad debt, and needs to be avoided. If you are an emotional spender, then you can create a budget for it, so that you don’t have to feel bad every time you buy something you hadn’t planned for. We do need a good dollop of fun and pleasure in our lives.

Trust yourself, invest wisely…and have some fun!

As always, I’d love to hear your stories and thoughts, and looking forward to reading them in the comments section.

With love and bliss,





2 thoughts on “Good debt, bad debt…and how to tell the difference!

  1. Hi Julia,

    Have a wonderful trip I am envious sounds like fun. thanks for the encouraging words around forgiving people who owe me money. I have a generous heart but get resentful when they don’t pay me back as promised, and it does rob me of energy. So after reading your email I have let it go, this will free me up to use my energy on my business. I have been meditating recently and it’s amazing how things cross my path at the time I need them. Have fun and keep us posted. Alison

Leave a comment