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Debt can carry some negative connotations in society as we may have heard of stories of people running into debt problems. However, if you use it for sensible reasons and the regular payments are well-managed, debt can be an important part of your financial planning to help you realise your life goals.

There are many common items that determine your level of debt such as credit card payments, mortgages or fixed term contracts with monthly payments. Actually, it is a very common phenomenon for people in modern society to be in debt.

Obtaining credit is easy in Hong Kong. The Hong Kong Monetary Authority's statistics show that people in Hong Kong on average own more than two credit cards – a good number of us have more. There are many kinds of loans available in the market provided by different creditors including banks, deposit-taking companies and moneylenders.

While using this available credit to fund parts of your life goals such as for education or to buy a home can be attractive, we need to manage our own debt responsibly and effectively. You should think twice before borrowing money. Work out whether you really need credit, and consider alternative options to ensure that borrowing is not the only solution for achieving your aims. Avoid accumulating too much debt as this affects your credit score and can also lead to higher interest payments. There may be hidden and subsequent extra fees that could be an unforeseen addition to your financial burden.

When taking out a loan, do not only pay attention to the advertised interest rate, but take note of the conditions that apply to the top line offer which may not be obvious at first. There could be handling charges and other added-on fees that make the loan more expensive than advertised.

Be conscious of the many debt traps. For example, there are advertisements or intermediaries that may encourage you to pledge your property in the application for a loan. You may be encouraged to sign up for plans that are not what you think they are, or have hidden fees. Be aware of suspicious or "too good to be true" offers, check who you are dealing with, and report to the police if you think that you have become a victim of a scam.

If you find yourself in the unfortunate circumstance of running into debt problems, don't ignore them. They will only grow into a bigger problem over time.