Must I go into debt to get loans?
Q: We want to buy a new car, and we have the cash available, but people are advising us to rather get it on credit, as he qualifies for this, because this will affect our home loan approval at a later date. Does the saying "to make debt, you have to have debt" still apply? Will it affect our application by such a big margin? Is it worth paying all the interest on the car? Thanks

A: The saying "to make debt, you have to have debt" applies in a sense because most of them request credit references. There are ways in which you can build up a credit record here and there such as buying a piece of furniture on account which one can obtain with a salary slip and not have a bad credit record. You can even pay off the item quicker if you don’t really want to pay the interest but in the end you have the reference available.

To read more of Charne's debt advice, click here.

Can I afford a car?

Q: I have a financial problem, I earn R6000. In my accounts I pay R3710 per month. When I add then they are more than R25000, some of them I will finish next year October. I have two credit cards, but I destroyed the other one so that I can stop using it. I want to buy a car by December this year and I'm really struggling to get to work. How should I manage my debt?

A: I'm not sure how the finance houses are going to view it, but if I look at the clients who I helped to obtain finance on their vehicles, I don't think you will be able to afford a car if your debt takes more than 50% of your salary.

My personal advice, even if you will get finance without a deposit of 10% on the vehicle, is that you should wait to your debt is cleared before you buy a car…

How should this reader manage her debt? Charne answers here.

5 Steps to buy a car
Q: Hi, I have been working for the same company for about four years. I'm on an indefinite contract with the company. I would like to know if it's possible for me to buy a car by applying for a loan. Where would I even start? And what process do I have to follow for a loan?

A: Motor finance may be cheaper (lower interest) than a personal loan, for example.

1: Check your budget
You start by making sure what you can afford to pay comfortably each month on all related costs. This means not only the payment on the vehicle's finance account but also the insurance as well as the running costs (repairs, maintenance, tyres, fuel, etc.). When you have an amount that you can work with per month, you can start your research.

Read Charne's complete guide for car buyers here.

How to invest
Q: Dear Charnè, over the last year I have managed to save a bit more than R100 000.00 in my flexi deposit account mostly because of my new job and salary… Now that I have reached my target I desperately need your advice on how to invest my money. I want to take it to the next level. Do I invest the money in my home loan or into shares a retirement fund?

A: Although I'm not allowed to give you specific advice without doing a full analysis on your unique situation, I hope I can give you some general tips and information that will at least point you in the right direction. I will not normally give the same advice to every second person because so many factors influence advice:

- How old a person is;
- How secure your job and income is;
- Whether you have a partner with a second income;
- What your other expenses and responsibilities are each month; and
- How much risk you are prepared to take with an investment...

Want to know more? Charne offers a cohesive example and plan here.

Bust your budget blues. Ask Charne for personal advice here.

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