How to Borrow Money Responsibly

When you borrow money, you need to understand the difference between incurring necessary debt and unnecessary debt.

Necessary debt is incurred when you borrow money to purchase an essential item, such as a home or car, which you are unlikely to be able to buy outright with your cash savings alone.

Unnecessary debt is usually taken on to finance something that you do not really need or that you should be able to pay for in cash if you had budgeted properly.

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