How Do You Handle Your Debt?
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We all get the basics of debt: live within your means, save for big purchases, avoid unnecessary borrowing. However, we still come up with excuses to take on more debt. Below are some reasons that we have probably all used at some point.
“I Absolutely Must Have It!”
The line between “need” and “want” is sometimes blurry. There have been instances when I persuaded myself that a “want” was a “need” and reached for my credit card. Looking back, many of these items were not necessary and resulted in buyer’s remorse later.
I used my credit cards heavily as soon as I began working believing that there were no other options available to me. In case of overspending in any pay period, I blamed my employer rather than my own spending behaviors. Upon reflection, places where I could have saved money like cable television, an expensive cellular plan; eating out and entertainment existed. I thought they were necessities but they weren’t.
“Just After Payday”
Another common excuse would be that once I receive my next salary or bonus payment then this will be cleared up fast enough. While using a credit card in your financial strategy can help if always paid off; employing it as the emergency stopgap before payday is another kettle of fish altogether. This kind of thinking can make you spend more than you realize and one unexpected purchase may put you into an unbreakable cycle of debt.
“It’s Good Debt!”
Not every loan is bad but using the term ‘good’ may be misleading. For instance, borrowing funds for education or purchasing a home might be good; yet excessive spending might lead to financial problems instead . Even though bigger mortgage or additional college loans for non-essential things are seen as ‘good debts,’ they could still prove difficult to repay.
Debt Is Debt
No matter how it is classified or justified, indebtedness can ruin your financial planning. It is not only about your money, but also your life in general. Beating consumer debt is crucial to attaining financial independence. Debt diverts your resources, prohibiting you from investing, saving, or capitalizing on opportunities.
Before you borrow some money, think whether the thing really matter that much. The short-term joy may be not worth long-term commitment .Besides having to repay a debt first before making further purchases and investments as such it may hinder any additional shopping due to debts accrued in the past. Also, interest payments serve the lender’s interests rather than yours hence depleting your resources even faster.
Lost Opportunities
Debt payments limit cash flow for taking advantage of new market opportunities and delaying critical goals like retirement savings. Paying off these debts will free up funds for investment purposes or saving which in turn allows you to wait for other chances and grab them when they come up .My personal example illustrates this: avoiding a mortgage gave me an opportunity to create a successful web business that would have otherwise been impossible.
Emotional Burden
The immeasurable stress can result from owing money causing mental illness; physical health problems; and relationship crisis. Financial worries can lead to anger issues, broken relationships and even physical health challenges like heart ailments. Designing and implementing programs meant for reducing debts can decrease anxiety levels while promoting overall well-being.
The Summary
I have not supported the idea of borrowing money, even if it is regarded as “good debt” like a home loan, unless you can afford it. No matter why, indebtedness makes your financial stability stagnant. Nevertheless, responsible management of credit could be useful; however, there use is not enough justifications for unnecessary debts which act as stepping stones to success. Being debt free allow you to have choices and a life of little stress that is more rewarding.
Associate Writer • Social Media and Cultural Trends Writer
Sebastian creates compelling posts, topics, and reviews of social media and cultural trends to help readers on what’s in and what’s out.
