Why experts say rethink labels

Key Points:

• Bryanna Hambrick's experience buying a home in Columbus, Ohio, illustrates how "good debt" like mortgages can become financially burdensome due to unexpected costs such as higher property taxes, interest rates, and repairs.
• Financial experts caution against assuming all "good debt" is risk-free, advising individuals to carefully evaluate long-term affordability, loan terms, and personal financial stability before taking on debt for homes or education.
• Sheila Bair, former FDIC chair, emphasizes avoiding pressure to buy homes or borrow for college unless financially sensible, recommending living in a home for at least five years to offset transaction costs and market fluctuations.
• Financial psychologist Brad Klontz highlights common pitfalls including impulse borrowing, overly optimistic income expectations, and emotional spending, urging people to treat debt as a business decision and avoid debt for short-term lifestyle choices.
• Hambrick reflects that focusing on the home's cost rather than aesthetics might have been wiser, noting that first homes do not need to be forever homes and that her property’s appreciation was less than expected, making her debt feel like a poor decision.