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MANILA - Most people look at debt as something bad, but with proper financial management, debt can also considered as aid.

Speaking to ANC's 'On the Money,' Efren Cruz, a registered financial planner, explained that some debt can also be good.

Money borrowed to acquire something that can help generate income and increase wealth can be considered good debt. Examples of good debt are student loans, business loans, and mortgage.

Cruz, however, warned against starting a business on a 100 percent liability, as it can eventually lead to bigger problems.

This can also be applied when buying a house. Although a non-earning asset, buying your own house is a good investment, provided that you have enough to pay bills, taxes and other expenses that come with your house.

No matter how "good" debt is, it can still turn bad if not managed properly.

"For example, you use debt to pay for your children's tuition. That is good to a certain extent, if for example, hindi mo napaghandaan masyado due to certain circumstances beyond your control, that's fine," Cruz said.

"However, if you are perenially borrowing to send your children to school, that's a symptom of a bigger problem. Perhaps, hindi ka nakakapag-plan, nakakapagbudget to send your children to school," he added.

Cruz also warned against borrowing an amount that you might be unable to repay.

"Debt to buy a home is not bad. Actually, it is good because many of us don't have the money to buy a house in cash outright. But you should also borrow enough that you can repay. If you borrow too much, because you wanted a bigger home na hindi mo naman afford, then that's where debt becomes bad," he added.

Bad debt, or money borrowed to purchase depreciating assets like cars, jewelry, expensive bags, or vacation, should be avoided at all cost.

According to Cruz, one of the easiest way to fall into bad debt is using your credit card mindlessly.

"Debt is death to those who abuse it. The reason why people think credit card debt is bad is because they abuse it. One of the reasons why they abuse it is because its so convenient to use eh. You just bring it with you, you swipe, and then you've bought anything you want," he said, adding that the convenience a credit card brings is what destroys one's finances.

The best way to avoid bad debt? Leave your credit card at home.

"You should leave your credit card at home. If you bring it with you, you will get this false sense of wealth that you can buy anything your heart desires," Cruz explained.