Not all debt is created equal—are you using it wisely?

For most of us, debt feels like a trap. A monthly debit order that keeps showing up no matter how much you pay. A Woolies account that was supposed to be "for essentials" but now has you financing chocolate croissants. A credit card that started with a small swipe but now eats your paycheck before you even see it.

But what if we told you that debt isn't the enemy? The problem isn't that you owe money; it's the type of debt you have and how you use it.

Good debt: The kind that builds your future

1. Home loans

   Buying property is an investment (if done wisely and within your means). Even if it feels like you're in debt for years, a house can grow in value, helping you build generational wealth.

2. Education loans

   A degree or specialised skill set can increase your income potential. The key is making sure you're not taking on R500K in student debt for a qualification that pays R10K a month.

3. Business loans

   If done with a solid plan, borrowing to start or expand a business can pay off massively. Just make sure you're not using it to fund lifestyle expenses instead of real business growth.

Bad debt: The kind that keeps you stuck

1. Retail store accounts

   Edgars, Truworths, Jet… sounds familiar? Clothing accounts often come with sky-high interest, and let's be real - those jeans won't increase in value.

2. Credit card splurges

   That R1 500 dinner at Tasha's was fun, but if you're still paying it off 3 months later, was it really worth it?

3. Short-term loans with high interest

   A quick loan from the bank or a payday lender might feel like a lifesaver, but the exorbitant interest rates can trap you in a cycle of debt that's hard to escape.

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Before taking on debt, ask yourself:

• Will this debt help me grow financially in the long run? If yes, it's likely good debt.

• Can I afford the repayments WITHOUT struggling? If not, rethink it.

• Is this an asset or a liability? If it loses value, it's likely to be bad debt.

 Example:

• A home loan = good debt because your property value can increase.

•  A car loan that takes up a large portion of your income = bad debt. Even if it's convenient, if the repayments leave you stressed, missing other bills, or relying on credit to survive — it's not sustainable.

• A clothing account = bad debt because you're paying interest on items that lose value the second you wear them.

Debt isn't just about numbers - it's psychological 

• The "I deserve it" trap → You work hard, but rewarding yourself with credit is a dangerous game. Instead, plan for luxuries by saving ahead.

• The "I'll pay it off later" mindset → If you only pay the minimum balance, you're in a cycle. Increase your repayments and clear debt faster.

•         The "I'll just take a quick loan" habit → Using loans for day-to-day costs is a red flag. Track your spending, trim where you can, and rebuild from there — no more borrowing to survive.

Try this instead: Press pause and track every cent you spend for one week. There is no pressure to change anything yet; just observe. Then, highlight where short-term spending can be cut, even temporarily, and channel that into covering essentials without borrowing. Awareness is the first step to a reset.

Break free from debt – your step-by-step plan

•         Prioritise paying off high-interest debt first. That's your credit cards, store accounts, and short-term loans.

•         Consolidate debt where possible.

•         Stop using credit for daily expenses. If you can't buy it cash, do you really need it?

•         Track your spending. You'd be shocked at how much is disappearing on takeaways, Uber rides, and "quick" grocery runs.

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