Managing Your Debt

Here is a simple guideline: Never spend cash you do not have. Whatever you want to buy, if you cannot afford the payments to pay it off within a few months, you likely do not need to buy it till then either. Think about how much money you have in your savings account. Can you use your savings to cover the full or bulk of the cost?


It is important to think hard about what you need. There will always be things in life that we want, but that does not mean we should get into debt just to have them. You can have what you want without paying for it for years if you save the money for it first.

When Can I Get Credit?

If you are wondering, “Okay, so if I should not use credit to get something I want, when can I use credit?” The answer is to buy something you need. Something essential.

Is It Essential?

Think about how much you or your family really need this essential item. For instance, if your washing machine breaks down, does it need to be replaced right away, or can you go without it while you save the cash to buy a new one, rather than having to finance it and pay interest?

False Economy

However, if your oven or stove breaks, you might have to stop cooking at home and eat out instead, which will cost you more money than the interest you would pay to buy a new oven on credit. These are the kinds of choices that need to be carefully considered so your financial status will not be negatively impacted in the long run.

Feel Confident in Your Decision

Give all options careful thought and review them again before deciding, so when you are still paying off your dishwasher a few months from now, you can feel confident that you carefully explored every possibility.

Wise Credit Use

What constitutes proper credit use? Any time you responsibly use credit. This includes making any purchases after giving them careful thought and knowing you can make the necessary payments promptly, eventually paying off the item completely.

Beware the Shopping Spree

Being sensible with your credit does not mean going on a shopping spree. Do not justify impulsive spending by saying you will make the monthly payments when you only intend to make the minimum installment. And the dramatic splurges you see in the movies? Just remember that those actors have fake money and no real consequences for their actions.

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