Give Yourself Some Credit

How you feel about debt boils down to personal experience. Although running away in an attempt to avoid it won’t make it vanish – it may come as a relief that not all debt is bad. Senior director of consumer interactive at TransUnion Garnet Jensen sheds some light.

- Thobeka Phanyeko

The stage you’re at in your life significantly affects your relationship with debt.

If you’ve just entered into the workforce, receiving a monthly pay cheque could also mean you’re receiving calls from creditors, offering you anything from phone contracts to clothing accounts, and vehicle financing. If you’re wary of accumulating debt, your natural response will be to decline their offer, but if you’re more inclined to act impulsively, you could find yourself in trouble. First, you need to be able to differentiate between the kind of debt that increases your net worth and the kind that drains your wealth, also known as good and bad debt. ‘Good debt is a sensible investment in your financial future because it helps you make money. Bad debt, on the other hand, won’t help you generate an income – vanity purchases are a good example,’ explains Jensen.