#2 When Debt becomes Ugly?
Let’s say you don’t have money at all to meet your expenses and you keep on borrowing using your credit cards or from some other financial institutions to spend on your day to day living expenditures. You can clearly picture yourself falling deeper and deeper into the debt pit. The deeper you are into debt, uglier the things will become for yours.
This was an extreme case. Now let’s consider a scenario where you do have money in your account and you can have a decent living from your income sources. Somehow you are pressurised socially to make big-ticket purchases which you don’t even need or you don’t have the money to spend on. An example could be that one of your neighbours bought a new trendy car and you felt the urge to purchase the similar car which is beyond your means. Soon you will be deep into the debt. However, if you save money first and then buy the car or find a deal where your monthly payment is never going to be more than what you earn, there should be no problem.
The key here is to carefully judge your financial means and manage your income so that you stay out of debt. Remember that even though you don’t have a posh car or a luxurious lifestyle. As long as you are not broke and stuck in the debt pit, people will still respect you the way you are. Imagine if you are broke just because you made financial mistakes of spending money on things which were beyond your means, will people still respect you?
Now that we have an understanding of the fact that debt can be ugly but if we use the debt for carefully judged investment, the same debt can be the best thing you may ever have.
#3 Avoid Buy Now Pay Nothing Till …
I am sure that all of us have seen these flyers and newspaper advertisements with bold big headings begging you to buy all those big ticketed items now and pay nothing for next 12 months or even 24 months. Well, it does feel good to buy all that stuff without paying at that time but the only catch is that if you don’t pay on time, you will be sucked into debt for years. The interest rates on these offers are usually very high and start to accumulate from the day you made that purchase. The general rule here should be that don’t buy if you don’t have money to buy. So, it might be a good idea to save first and then buy that product.
#4 Change Your Attitude
Do you remember a time when you had the money to pay your credit card balance and you didn’t pay it on time just because of your laziness or habit? Your this little mistake will cost you extra cash to pay and you may be paying the interest for next two months for all the purchases or cash advances you make using your credit card. Just close your eyes and think for a moment. Is it really worth missing your payment for even a one day when you have money? I am sure your answer will be no. So don’t do it next time and pay your bills on time.
#5 Credit Cards Are Not Bad if Money is Paid Back on Time!
Are credit cards bad or having the credit card is like being cursed? The honest answer is NO, credit cards are not bad it is the way we use these cards. I understand that if you have the credit card in your pocket. Then you may want to use it for anything you like and feel the urgency to buy.
The rule here is kerbing that habit of buying things. This is specially when you don’t have the money or you don’t need them. I would not buy anything using my credit card if I have no money to pay that back. If you believe that you can’t do that. Then you may think of getting rid of all the credit cards. You can use either debit card or cash only for all your purchases.