Wise and unwise use of debt is about as difficult to understand as white hats versus black hats in a horse opera.

But millions of people get it wrong, as evidenced by the nation’s huge consumer debt.

Here’s what you need to know: The smart use of debt is an investment in the future - a mortgage for a house that will increase in value, or a student loan for an undergraduate or graduate degree that will boost job satisfaction and earning power throughout your career. Dumb debt is used to support a lifestyle that couldn’t exist without blowing out multiple credit cards.

“In general, don’t pay off your student loans any faster than you have to,” says Stuart Ritter, a certified financial planner for T. Rowe Price, who also teaches a class in personal finance at Johns Hopkins University. “Most student loans have a low interest rate and there are better uses of your money such as boosting your contribution to your 401(k) to get or increase the employer match, paying off your credit card debt or increasing your savings.”

Think of your friends or acquaintances with unbelievably spiffy clothes, a pricey apartment filled with electronic gizmos, a fancy car, dream vacations - and crushing debt. Such people are dumber than a fence post when it comes to managing their money.

It’s easy to fall into debt because we’ve moved to a society of plenty from a society of scarcity, and there’s no longer a social stigma attached to unpaid bills. If you doubt it, talk to someone who grew up during the Great Depression of the 1930s and came of age during World War II. Advertisements aimed at this age cohort once urged people to think of a credit card as money because most avoided consumer debt. Now, some TV gurus and pop shrinks blithely talk about shopping as an “addiction.”

Horse exhaust.

You’re smart, you’re in charge and you make the decisions. In short, you’re responsible. If you overspend and get eaten alive by debt, it’s a bad use of your money and your own stupid fault.

Warning: This is called individual responsibility. It was once received wisdom, but is now widely scorned. Even a Republican president now plans to bail out folks who bought houses they couldn’t afford and -- boo-hoo -- didn’t realize the variable rate loan would increase in the future, exceeding their ability to pay.

“Your credit standing is about your reputation,” Ritter says. “A solid credit rating tells others that you do what you’ve committed to do, as evidenced by paying your bills on time. When you seek a house loan in the future, the lender will believe in you. If you don’t pay your student loan as agreed, people will question your reputation and willingness to follow through on commitments in the future.”

You can avoid the pitfalls that gobble many people’s paychecks by learning the basics of personal finance, including budgeting, saving and deciding to forgo things slick advertising campaigns say you’ll die (or worse) without. This is tough for some to understand, un-American even: Wait until you can afford your heart’s desire.

Understand that a credit card isn’t free money and banks aren’t the National Endowment for the Arts. Credit cards are tremendous moneymakers for banks, because millions of people pay 20% interest or more on a hefty balance each month.

If you limit monthly spending to what you can afford and pay the bill in full each month, you’ll be fine. This may mean that your living room is furnished by garage sales, your dinner plates are from Costco (COST) or Target (TGT) and Wal-Mart (WMT) is your tailor, but so what? You’ve just completed a bachelor’s degree and are taking your first steps in launching a career.

Relax, your income will increase as your experience grows and you become more valuable to employers.

Some students learned their bad financial habits from their parents. This makes it harder to overcome overspending, but it’s not an unshakable monkey on anyone’s back.

Start with something easy and immediate: Do you need a new car right out of school?
Of course not, but many kids take out a large car loan as soon as they line up their first job out of college.

This is a colossally bad idea because you should be saving now to build for the future. If your current clunker still has four wheels, keep it.

“People have to learn how to live off less than they’re making,” says Drew Tignanelli, a principal at The Financial Consulate in Baltimore. “That’s a foreign concept to an American because we like to live off 110% of our salary.”