Personal Finance
Bad Debt
Definition
What is Bad Debt?
Borrowing for consumption or assets that do not support repayment, especially at high cost.
Example in practice
How This Looks in Practice
High-interest debt used for discretionary spending can weaken investmentAn asset or commitment of money made with the expectation of future income, growth, or both. capacity.
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Related Terms
Personal Finance
Savings
Money set aside rather than spent, often for emergencies or future goals.
Personal FinanceEmergency Fund
Liquid savings reserved for unexpected expenses or income disruption.
Personal FinanceNet Worth
Total assets minus total liabilities.
Retirement InvestingWithdrawal Rate
Annual portfolio withdrawals divided by the portfolio's starting or current value.