How To Distinguish Between Good Debt And Bad Debt


Debt for many people is a way of life. However, there is so much financial misinformation that many think of debt as a dirty word. There are many differences between what is considered good debt and bad debt, and we are here to clarify them. Before taking on any kind of debt, consider if this debt will have a positive or negative effect on your financial situation.

What is Good Debt?

Good debt is any debt you acquire with the ability to pay back for the term of the loan. All debt is good debt until it becomes unmanageable.

Taking out a car loan

You should only apply for a car loan if you have a stable income to comfortably make the monthly payments. When your car loan is approved, then this is considered good debt because it means an institution trusted you enough to loan you money.

Borrowing money for a student loan

Student loan debt is rarely ever a bad decision. Due to the high cost of college, sometimes you have no choice but to take out a loan. It is not frowned upon because you are pursuing something that will be beneficial to you in the future. It is important that you be responsible when these loans come in and you make all monthly payments on time so your debt remains in the “good” category. If you struggle to pay in a timely fashion each month, then you may want to consider having an income based payment plan or extended payment plan. Make sure you do your research before your loan payments begin. Once you start missing payments, then this can become bad debt.

What is Bad Debt?

All debt comes with strings attached. It is only when those strings become uncontrollable and hard to reach that your debt can become bad debt. Remember, all bad debt can flip into the positive if you manage it more closely.

High credit card debt

The average household credit card debt is slowly increasing every year. It is when your credit card continues to increase and reach the limit that it becomes bad debt. To ensure it doesn’t stay this way, make your highest interest credit card your top priority. Try your best to get your balance down to $0. If this is too difficult to do in a month, then try for a 3 month pay-down. For example, make your usual monthly payment and then consider contributing additional payments whenever you can.

All bad debt can turn into good debt if you manage it more closely.

If your tax refund is sitting in your savings, this may be a good time to tap in and use a small portion to help pay off your credit card quicker and more effectively. Tackle that debt as soon as it gets out of hand to ensure it doesn’t happen again.

Non-essential items

It has been noted from financial experts that the majority of discretionary expenses (needs vs. wants) is non-essential. An expense can be determined as non-essential if you are following a budget plan and motivated to remove the bad debt. Non-essential items that you may want to consider removing from your budget can be: $5 lattes twice a day, take-out lunches 3 days a week, designer clothes, top-tier cable TV stations, season tickets, and other novelties. These non-essential items can cause you to go into bad-debt because they tend to get out of hand. Overspending tends to be a bad habit, but it’s something you can break easily!

..It is important you make all your payments on time so your debt remains in the "good" category.

There is no shame in having debt. Without it, we wouldn't be able to achieve many milestones in life like going to college, buying houses and cars. To ensure your good debt never becomes bad debt, take time in creating a budget for your short-term and long-term financially planning.

Rather than fearing and avoiding your debt payments, embrace them and learn to manage your situation properly. If you prepare for your bills to come in and budget effectively, then your money will be better managed and your debt will never turn on you.


A Modern Day Witch Hunt: How Caster Semenya's Gender Became A Hot Topic In The Media

Gender divisions in sports have primarily served to keep women out of what has always been believed to be a male domain. The idea of women participating alongside men has been regarded with contempt under the belief that women were made physically inferior.

Within their own division, women have reached new heights, received accolades for outstanding physical performance and endurance, and have proven themselves to be as capable of athletic excellence as men. In spite of women's collective fight to be recognized as equals to their male counterparts, female athletes must now prove their womanhood in order to compete alongside their own gender.

That has been the reality for Caster Semenya, a South African Olympic champion, who has been at the center of the latest gender discrimination debate across the world. After crushing her competition in the women's 800-meter dash in 2016, Semenya was subjected to scrutiny from her peers based upon her physical appearance, calling her gender into question. Despite setting a new national record for South Africa and attaining the title of fifth fastest woman in Olympic history, Semenya's success was quickly brushed aside as she became a spectacle for all the wrong reasons.

Semenya's gender became a hot topic among reporters as the Olympic champion was subjected to sex testing by the International Association of Athletics Federations (IAAF). According to Ruth Padawer from the New York Times, Semenya was forced to undergo relentless examination by gender experts to determine whether or not she was woman enough to compete as one. While the IAAF has never released the results of their testing, that did not stop the media from making irreverent speculations about the athlete's gender.

Moments after winning the Berlin World Athletics Championship in 2009, Semenya was faced with immediate backlash from fellow runners. Elisa Cusma who suffered a whopping defeat after finishing in sixth place, felt as though Semenya was too masculine to compete in a women's race. Cusma stated, "These kind of people should not run with us. For me, she is not a woman. She's a man." While her statement proved insensitive enough, her perspective was acknowledged and appeared to be a mutually belief among the other white female competitors.

Fast forward to 2018, the IAAF issued new Eligibility Regulations for Female Classification (Athlete with Differences of Sexual Development) that apply to events from 400m to the mile, including 400m hurdles races, 800m, and 1500m. The regulations created by the IAAF state that an athlete must be recognized at law as either female or intersex, she must reduce her testosterone level to below 5 nmol/L continuously for the duration of six months, and she must maintain her testosterone levels to remain below 5 nmol/L during and after competing so long as she wishes to be eligible to compete in any future events. It is believed that these new rules have been put into effect to specifically target Semenya given her history of being the most recent athlete to face this sort of discrimination.

With these regulations put into effect, in combination with the lack of information about whether or not Semenya is biologically a female of male, society has seemed to come to the conclusion that Semenya is intersex, meaning she was born with any variation of characteristics, chromosomes, gonads, sex hormones, or genitals. After her initial testing, there had been alleged leaks to media outlets such as Australia's Daily Telegraph newspaper which stated that Semenya's results proved that her testosterone levels were too high. This information, while not credible, has been widely accepted as fact. Whether or not Semenya is intersex, society appears to be missing the point that no one is entitled to this information. Running off their newfound acceptance that the Olympic champion is intersex, it calls into question whether her elevated levels of testosterone makes her a man.

The IAAF published a study concluding that higher levels of testosterone do, in fact, contribute to the level of performance in track and field. However, higher testosterone levels have never been the sole determining factor for sex or gender. There are conditions that affect women, such as PCOS, in which the ovaries produce extra amounts of testosterone. However, those women never have their womanhood called into question, nor should they—and neither should Semenya.

Every aspect of the issue surrounding Semenya's body has been deplorable, to say the least. However, there has not been enough recognition as to how invasive and degrading sex testing actually is. For any woman, at any age, to have her body forcibly examined and studied like a science project by "experts" is humiliating and unethical. Under no circumstances have Semenya's health or well-being been considered upon discovering that her body allegedly produces an excessive amount of testosterone. For the sake of an organization, for the comfort of white female athletes who felt as though Semenya's gender was an unfair advantage against them, Semenya and other women like her, must undergo hormone treatment to reduce their performance to that of which women are expected to perform at. Yet some women within the athletic community are unphased by this direct attempt to further prove women as inferior athletes.

As difficult as this global invasion of privacy has been for the athlete, the humiliation and sense of violation is felt by her people in South Africa. Writer and activist, Kari, reported that Semenya has had the country's undying support since her first global appearance in 2009. Even after the IAAF released their new regulations, South Africans have refuted their accusations. Kari stated, "The Minister of Sports and Recreation and the Africa National Congress, South Africa's ruling party labeled the decision as anti-sport, racist, and homophobic." It is no secret that the build and appearance of Black women have always been met with racist and sexist commentary. Because Black women have never managed to fit into the European standard of beauty catered to and in favor of white women, the accusations of Semenya appearing too masculine were unsurprising.

Despite the countless injustices Semenya has faced over the years, she remains as determined as ever to return to track and field and compete amongst women as the woman she is. Her fight against the IAAF's regulations continues as the Olympic champion has been receiving and outpour of support in wake of the Association's decision. Semenya is determined to run again, win again, and set new and inclusive standards for women's sports.