What is the definition of debt?

Debt is defined as money that you owe to someone, which directly aligns with the correct answer. This definition encompasses any obligation to repay borrowed funds, whether that be through loans, credit card balances, or any other form of borrowing. Debt implies that there is a financial liability or obligation to pay back the principal amount, often with interest, and it can arise from various situations such as borrowing from a bank, financing a car, or using credit for purchases.

Understanding this concept is crucial for effective personal finance management, as carrying debt can impact an individual's financial health. Managing debt responsibly is key to maintaining good credit scores and ensuring that financial obligations do not become overwhelming over time.

In contrast, the other options do not accurately define debt. Wealth, for instance, refers to assets owned, income pertains to earnings from work or investments, and funds available for investment describes cash reserves earmarked for future investments. Each of these concepts relates to financial management but does not represent the nature of debt itself.