If you're like me, you have been taught believe that debt of any kind is bad, and that you should stop using debt, strive to pay off the debt you do have, maybe even including your low interest home mortgage. Like many people I ignored that advice and accumulated a respectable level of debt-- student loans, automobiles, credit cards, store cards, and probably a few other accounts I've forgotten about. I spent a good deal of time and energy worrying about, and working to pay off all my consumer debt-- which I did.

Maybe you've read Robert Kiyosaki and some others who have been teaching that there's a difference between the kinds of debt you have-- "good debt" is debt used to acquire assets like a business, or real estate that pay you a decent return; and "bad debt" that is used to leverage depreciating consumer goods.

I came to that realization after I bought a new construction home to live in. I went into the transaction with the idea that there was no way I was going to overpay the builder for options like appliances, lighting, and simple things I could do myself for a fraction of the price the builder wanted to charge. Or, could I? You may have heard popular debt-free living gurus give examples like this: "If you paid $900 for an appliance in a 30 year mortgage you would actually pay $8,657 for it. What idiot would do that? You don't want to be an idiot do you? Buy my book, "How to Live Debt Free Once and For All". Are they right? Maybe not.

The thing is, I'm not going to live here for 30 years. In all likelihood, you will not live in your property for 30 years either. Thus, you will never actually pay $8,657 for your $900 fridge. I realized this after it was too late. I was indignant about paying $1,200 for the same model appliance I could get for $900 on my own. So, I closed on my property and proudly went to a place where they sell the aforementioned appliance. Of course, being the genius that I am, I not only paid $300 less for it, I got a year same as cash financing because I know a dollar tomorrow is always worth less than a dollar today-- thus I saved even more.

That's when it hit me. I'm planning on living in that property for five years at the most, but more likely I'll just live there two to three years. In one year, I will have to pay for that appliance in full-- or pay back interest charges, and start accumulating even more interest charges as I go. Full boat retail interest, too. So, I'll pay it off. $900 bucks. Had I paid $1,200 for the builder's model I would actually only have paid $8 bucks a month for 60 months in the worst case scenario. If you're real quick with numbers, which apparently I am not, you have already figured out that comes out to $480 bucks. Not only that, but I would get today's value for progressively lower valued dollars over the next five years.

Conventional wisdom is that the average American saves too little and carries too much debt. As a result, they over pay for everything when you figure out the interest. I'm not advocating irresponsible and costly consumer debt. Rather, I'm advocating reasoned decision making in what can be a sensitive, emotional area of life. Debt might cost more in many instances, however in this case I discovered that an emotional, knee-jerk aversion to debt can cost a person $420, plus the opportunity costs.