The compass is an absolute must for any witch. So much magick depends on knowing the polar directions. Obviously the altar should be aligned according to the compass points. Magickal workings themselves will often be in a specific direction.

It doesn't have to be an extremely expensive compass. A basic one will do. Either way you need to calibrate it for accuracy. Check for north in whichever room you choose to make your sacred space in and then go outside and make sure that the north that was shown in the room corresponds to the north shown outside. The reason for this is simple. There is so much in a modern house that is made of iron or steel that the compass heading can be affected. Checking for north outside double checks your inside reading and lets you know wheteher you have to make a correction for north inside.

If you take your ritual tools with you when traveling then obviously the compass should go with you so that wherever you are, the polar directions can be determined.