Debt. At various stages in life we all need to borrow money in order to buy things – houses, property, a business or a vehicle. But, not all debt is created equal!

In general:

·         It’s worth going into debt for things that increase in value after you’ve bought them – such as property or houses.

·         It’s not so good going into debt for things that decrease in value after you’ve bought them – such as cars or computers.

·         Avoid going into debt for things that have no value once you’ve bought them – such as holidays or entertainment.

If you do need to take on debt, make sure you know the full cost. How much are the repayments, over how long, what are the fees and charges, how much is the interest cost?

Make sure it costs as little as possible and have a plan to pay it off as quickly as possible. Make repayments as high as you can, paying off high-interest debts first and always try to pay more than the minimum.

If you have a home loan and other smaller debts, you may be able to consolidate debts by putting high-interest debts into a lower-interest loan. Providing you keep repayments the same you can save on interest costs and pay off debt faster (providing you don’t run up more debt along the way!).

Don’t forget to ask for help early if you’re in trouble. There are some great resources available on the Sorted website and free budgeting advice is available through Maataa Waka Trust in Blenheim on phone 577 9256.