Besides life's big-ticket items -- home, car and college -- you may be tempted to borrow money to pay for an assortment of other expenses such as furniture, appliances and home remodeling.

Generally speaking, it's best to pay upfront for furniture and appliances, since they don't add value to your home and are depreciating assets. If you do finance such purchases, however, read the fine print. Retail stores often charge high interest rates. And even if they offer a low-interest or no-payment period for several months on a purchase, you may be required to pay for the item in full at the end of that period or risk being charged a high rate dating back to the day of sale.

Taking a home equity loan makes sense if you're making home improvements that increase the value of your house, such as adding a family room or renovating your kitchen. The interest you pay is deductible and you increase your equity.

If, however, a home project doesn't boost your house value -for instance, putting in a pool -- consider paying cash or taking out a short-term, low-interest loan that will be paid off in five years or less.

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