Personal Finance Tips: Is Borrowing Money Good or Bad?

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Ellie G

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When it comes to personal finance matters is borrowing always wise? Following are five good reasons to borrow money.

Buying a home is a good reason to borrow money via a mortgage. Chances are a home will be the single largest investment you'll ever make. In most cases, it is an excellent decision provided you are able to comfortably handle the payments.

Borrowing to finance an education is a good investment in you or in your children. A higher education increases earning potential.

An RRSP loan is wise provided you are able to pay it off within one year. Carrying the debt for any longer isn't in your best interest.

Emergencies are another pretty good reason for taking out a loan or in some cases borrowing from friends or family. The caution here though should be that you only borrow as much as you really need and not a penny more.

Home improvements can also be a good reason to borrow provided it will add value to your home and you can comfortably work the repayment plan into your current cash flow. Do your homework before remodelling or adding on. Also if your home improvement adds any stress to your current financial situation it isn't worth it.