Yes, having no debt is generally considered good as it brings financial freedom, less stress, and more security by freeing up income for savings and investments, but some "good" debts (like a low-interest mortgage or student loans) can be strategic tools for building wealth, while high-interest debt (like credit cards) is best avoided. The ideal isn't always zero debt, but achieving a healthy financial balance by avoiding costly consumer debt and using other forms strategically.
Having no debt is a pretty good place to be. You don't have to worry about making payments every month, having some of your hard-earned salary go straight to some creditor or other, you can build up savings and have more freedom with your money and life. Continue like this and you'll be great.
New wealth data shows about 25 percent of Americans have a net worth of zero or less. Their debts match or outweigh everything they own. That means if you have no debt and even a small amount of cash, you are already ahead of a large share of the country. The bar is lower than most people think.
Having too much debt can make it difficult to save and put additional strain on your budget. Consider the total costs before you borrow—and not just the monthly payment. It might sound strange, but not all debt is "bad." Certain types of debt can actually provide opportunities to improve your financial future.
Being debt-free — including paying off your mortgage — by your mid-40s puts you on the early path toward success, O'Leary argued. It helps you free yourself from financial obligations at a time when your income is presumably stable and potentially even growing.
The 3-6-9 rule in finance is a guideline for building an emergency fund, suggesting you save 3 months of essential expenses for stable jobs, 6 months for most people (especially those with families/mortgages), and 9 months for those with irregular income (freelancers, sole earners) or high financial risk. It's a flexible strategy to provide financial security, helping you avoid debt or panic withdrawals during unexpected job loss or emergencies, with the exact target depending on your income stability and dependents.
According to Equifax, the average non-mortgage debt per consumer in Canada was $22,147 in the second quarter of 2025. Those between 26 and 65 carry the heaviest debt loads — between $27,000 and $34,000 on average — while younger adults (18–25) carry about $8,000, and seniors over 65 carry roughly $14,000.
39% of Canadians aged 55-64 have less than $5,000 in savings (-5 pts); 73% have $100,000 or less in savings. More than one in three (36%) women aged 55-64 have no savings at all, compared to one in five (22%) men.
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It might make sense, for example, to pay off your mortgage early if you struggle with keeping money in the bank. Your home can be a forced-savings tool, and making extra payments can save you thousands of dollars in mortgage interest over time, plus you'll build equity in your home more quickly.
Four Steps to Living Debt Free
Generally speaking, what makes a debt necessary is if it can potentially increase your net worth (like student loans or a mortgage), if it can improve or expand your business (like a business expense or loan) or if it's required and essential (like unexpected medical bills).
2. Who are the creditors of this debt? The debt is made up of government bonds held by individuals and financial institutions, mostly Canadian (around two-thirds of Canadian government securities are held by Canadian investors, such as insurance companies, pension funds, and financial institutions).
Yes, $5,000 is a lot of debt if it causes your debt-to-income ratio (DTI) to go above 43%. Your DTI is the ratio of all your monthly debt payments divided by your gross monthly income, and any percentage above 43% means you have too much debt to manage.
Discover signs that indicate you might be overspending and find out what to do about it.
The average American owes about $105,000 in total debt as of 2024, with mortgages making up the largest chunk. Gen Xers carry the highest credit card and auto loan balances, while Millennials have the biggest mortgages. Knowing where you fall can help you assess how manageable your debt load is.
Tips for Getting Out of Debt When You're Living Paycheck to Paycheck
Your $500,000 can give you about $20,000 each year using the 4% rule, and it could last over 30 years. The Bureau of Labor Statistics shows retirees spend around $54,000 yearly. Smart investments can make your savings last longer.