You probably don’t need to be reminded why racking up debt is a bad idea. Yes, we understand that spending money without any restriction is enjoyable; especially when you’re rewarding yourself for the hard work in the past year. Imagine going on a long vacation to Europe or buying the latest Smartphone model - all of these things can feel awesome but… worrying about your upcoming credit card bill isn’t going to be pretty too. As such, we prepared a few questions you can ask yourself on how to strike a balance between enjoying life and managing debt:

• Have I shopped around to get the best deal?
• Am I borrowing this money as cheaply as possible?
• Will I be able to cope should interest rates rise in the future?
• Will I comfortably be able to afford the monthly repayments?
• Do I understand all the terms and conditions associated with borrowing this money?
• Do I understand the risks and what could happen if things go wrong?

Answering these questions may serve as a simple guideline on how to keep your debt to a minimum and avoid any T&C which may be a rude shock to you in future. That said, borrowing money isn’t always a bad thing. In contrast, borrowing money wisely can probably help you generate more income and increases your net worth in the long run – a term known as Good Debt. Good debt is an ‘investment’ that will grow in value or generate long-term income. Taking out student loans to pay for a college education is the perfect example of good debt. Student loans typically allow you to finish your course of study before you start paying them back @ a very low interest rate compared to other types of debt. Furthermore, a tertiary education gives you the head-start to a better paying job and it definitely helps in building your golden nest egg in future.