Personal debt refers to the money that an individual borrows and is obligated to repay. This can include various forms of borrowing, such as credit card balances, personal loans, and mortgages. People often take on personal debt to finance large purchases, cover unexpected expenses, or manage cash flow. Managing personal debt is crucial for financial health. High levels of debt can lead to stress and limit an individual's ability to save or invest. It is important to create a budget and develop a repayment plan to ensure that debts are paid off in a timely manner, helping to maintain a good credit score and financial stability.