Good, bad and ugly debt

Handling debt the right way can have a positive impact.

By Sanja Ajzerle

Knowing little about debt and how to use it means people often see and know only the ugly side of debt.

Financial distress takes an emotional toll and one’s situation can swirl out of control very quickly. But it doesn’t have to be this way.

I am calling for people to take part in an online survey about how they use debt, as part of a Griffith Business School research project investigating attitudes to debt, and the characteristics of those who turn debt into a positive.

Debt not all bad

If it is utilised properly, a personal debt can actually work in your favour. Used correctly, it has the capacity to boost a person’s wealth.
This may sound unlikely, and a long bow to draw. I had my doubts when I first started my research in this area two years ago. But through a series of individual interviews and focus group exercises, my attitude changed and I began to see beyond the negative connotations of debt.

Put simply, there are those who use debt effectively and there are those who use debt ineffectively. There are those who manage debt, there are those who are overpowered by debt.
The good, the bad, the ugly.

What are the underlying traits that differentiate the individuals who are able to use debt effectively from those who do not? This is the proposition underpinning my research project.
To date I have found there may be a number of notable characteristics that identify individuals at risk of using debt ineffectively. These traits can be linked to factors like financial literacy, a person’s sense of control over and responsibility for their actions, and even their family and social environment.


People have indicated that the convenience of debt is part of its appeal. It is easier today than ever before to use debt to pay for retail goods. Debt facilities are often linked with reward programs to encourage the use of debt.
Debt has been become such an intrinsic part of life for many modern Australians.

It has become the preferred payment method for buying everything from investments to consumer goods.
Debt, in itself, is not a bad thing.

How it is used and how it is managed is important, however, as it affects almost 5.7 million Australian households.
In Australia, debt levels have soared to 150 per cent of a person’s disposable income, up from around 70 per cent in the 1990s.

With the onset of an electronic age which fosters debt at an unprecedented pace, it is vitally important that we have a greater appreciation of how and why people are using debt.

Griffith Business School honours student Sanja Ajzerle (above) is conducting online research into debt, gauging people’s thoughts and understanding about debt and analysing how they use it.

If you are interested in taking part in the confidential online survey, click through to the Debt in Australia survey.

The survey takes 10 to 15 minutes to complete, participants can go into the draw to win one of five $100 Coles Group & Myer gift cards.