For certain larger purchases, credit is necessary e.g. a home loan or car. Financial institutions’ interest rates vary and they may offer specific benefits that could suit a particular need. The answer lies in shopping around and making an informed decision.


Some purchases like a car, TV or computer are assets that do not increase in value. A car particularly depreciates in value the minute it is driven out of the showroom. Being aware of your real needs are allows you to make a sober decision around its necessity. Spending a little less on a similar item serving the same purpose, could save in interest and the difference may be used to enhance one’s overall savings.


Always assess the necessity of the debt before you commit to it. Paying off the debt as soon as you can will help to minimize the overall cost and ensures the gradual accumulation of affordable assets.