Chapter 1. Isn't Debt-Free the Way to Be?

Debt isn't the root of all evil—but sometimes it sure feels that way.

If you're struggling to cover your bills and are being hassled by collectors, you may curse the day you applied for your first credit card. If you're straining to make minimum payments that feel like maximums, you may swear you'll never borrow again. If you've just graduated with massive student loans, you may question why you ever thought going into debt for education was a good idea.

Even if you've got your bills under control, you may fret about the interest you're paying to some faceless lender or worry that some setback—a job loss, illness, or divorce—could sink your financial ship.

Many books about debt agree with you that owing money is awful, terrible, wicked, and something to eradicate as soon as you can. The authors recount how many dollars are wasted each year on interest payments, and they use anecdotes of people who lost their homes, their marriages, their health, and their peace of mind to too much debt.

They're right that debt when mishandled can be as corrosive as cancer. But the usual prescription is to pay off everything as quickly as possible and learn to live debt-free. The message is enforced with testimonials from people who overcame mounds of bills and who are proud that they live entirely on cash, no longer owing anyone a dime.

Unfortunately, this approach may not be realistic, and it can easily backfire.